Mobile Meets Retail @ Shopkick’s Location-based App

As consumers plunge into back-to-school fall shopping and well in advance of the holiday shopping season, there’s a new location-based shopping app in town–Shopkick. In case you’re thinking “ho hum, it’s just another app” consider this: By downloading the free app from iTunes, consumers will get direct access to retail offers and earn a currency dubbed “Kickbucks” that can be redeemed for rewards or donated to charity.

Shopkick says it will give consumers who’ve downloaded the app rewards and offers just for walking into participating retailers. When I spoke with Shopkick CEO Cyriac Roeding earlier this summer, he positioned the app as a conversion tool that would enable brick-and-mortar retailers to drive more foot traffic and rev sales.

Last week, Shopkick announced that its geo-retailing service will be deployed at 100 Simon Malls, a big coup, along with previously announced partners Macy’s, Best Buy, American Eagle and The Sports Authority. Best Buy will launch a test-run of the service in over 250 of its stores by Oct. 1. Best Buy, through a spokeswoman told me by email: “This is a part of our broader experiments with technology for consumers, and it’s a facet of our overall, multichannel approach to bridge the physical and digital retail experiences.”

Shopkick says rewards and offers are live now in partner store locations in New York, San Francisco and Los Angeles, and will kick-off in Chicago and other cities in the coming weeks. Within the next four weeks, more than 600 individual stores and 100 Simon-run malls will have fully deployed the technology.

Here’s how the thing works: When consumers enter participating retailers, their smartphones pick up a signal (a technology that retailers install) alerting them to relevant store offers. They receive Shopkick “Kickbucks” just for showing up which can be redeemed for rewards or donated to charity. Roeding takes pains to say that Shopkick is unlike regular GPS technology which requires consumers to check in. Instead, this system enables a seamless communication because of the Shopkick signal which doesn’t require check-in.

I think anything, including this app, that can lure shoppers into stores and drive purchases could be helpful to retailers provided that they tie in with smart, relevant offers. The app can be considered a form of multichannel retailing and could, if enough retail chains sign on and enough consumers download the app, become a decent form of in-store communication. Shopkick hopes, no doubt, that the app will keep shoppers in stores longer, browsing, taking advantage of offers and buying on impulse. The findings of a study by e-Rewards and TNS International found that 13.6% of GenY consumers used their phone to access the web for special offers and coupons while shopping.

If that’s the case, the Shopkick app makes it even easier since consumers won’t have to go out to the mobile web for those offers–they’ll get them automatically and seamlessly via the app.

Participating retailers are expected to deliver in-store deals, and/or added bonuses for scanning barcodes of specific products. For example, shoppers will receive Kickbucks for trying on clothes and scanning a barcode in American Eagle Outfitters dressing rooms. They’ll receive additional Kickbucks for scanning and learning about products and services at Best Buy. The faux currency can also be redeemed for Facebook credits to play online games online, download songs, in-store gift card rewards at participating stores, magazine subscriptions, iPods, and charitable donations.

The app has raised concerns among privacy advocates since offers are personalized based on consumer preferences, previous shopping behavior, interests, location and scans. Quoted in AOL’s Daily Finance, Jeffrey Chester, the executive director of the Center for Digital Democracy, said via e-mail: “Shopkick should rename their awards currency ‘kickback’ — instead of ‘kickbuck’ — because you are handing them a treasure trove of your personal data. Consumers have to ask themselves — is this a good trade-off for my privacy? Shopkick’s so-called rewards are really digital bribes so you will gave them carte blanche to collect reams of data on you.”

I’ll reserve judgement until I see how easy the app is to use and how retailers decide the kinds of personalized offers they’ll deliver.