Score Loyalty Points for Walking in a Store Stores generally do not know that a customer has visited until the customer buys something on the way out. A start-up, Shopkick, is betting that stores would also like to know when shoppers enter and reward customers for doing so. Shopkick is an app, which will be available in the next few weeks on the iPhone and later for other kinds of phones, that retailers can use to track when shoppers have entered a store and reward them with points or discounts. Other location-based apps, like Foursquare, Gowalla and Loopt, also function as virtual loyalty cards. Shopkick says it is different in a few critical ways. The other apps use cellphones? GPS signals. That means that someone could stand on a street corner and check in to a place to earn points without ever setting foot inside. Foursquare?s new automatic check-in service, for instance, checks people in when they are within 300 meters of a location. ?Check-ins are a really nice start, but unfortunately, most of them are fake,? said Cyriac Roeding, a founder of Shopkick. That is probably false, since the main point of the other apps for users is to share their location so they can meet up with friends. Still, Shopkick wants to reassure retailers that they are only rewarding actual customers. Instead of relying on GPS or Wi-Fi signals, Shopkick installs small devices in stores that send out an inaudible noise. Cellphones with the Shopkick app pick it up with their microphones. The company demonstrated the app to journalists at a Best Buy store in San Francisco on Tuesday. Stores that are partnering with Shopkick, including Best Buy and Macy?s, can offer personalized discounts. Shoppers redeem them at the cash register by giving the cashier their cellphone number. Shoppers also earn points, which Shopkick calls kickbucks, for entering a store, even if they do not make a purchase. These are redeemable for a variety of things, including gift cards, Facebook credits and Napster song downloads. Luring in customers is the biggest challenge for retailers and Shopkick addresses that, said Mr. Roeding. Shopkick was financed by the iFund at Kleiner Perkins Caufield & Byers and Greylock Partners. Retailers choose how much they want to pay for each customer that walks in the door ? similar to choosing how much to pay for a click on a search engine ad, for instance ? and Shopkick earns a mark-up on that price. ?For the first time in physical retail, marketing costs are 100 percent performance-based,? Mr. Roeding said. Stores will eventually be able to customize rewards based on where in the store someone visits, so shoppers might get additional coupons if they enter the home electronics section of Best Buy, for instance. Permitting Shopkick to install the device in stores is a bigger commitment for retailers than monitoring Foursquare to see who visits most often and offering them a reward. But retailers like the fact that unlike other location services, Shopkick is at heart a shopping app instead of a social app, said Margita Labhard, director of the new business customer solutions group at Best Buy. ?If you know the customer, who they are, when they come in and what they?re doing, you can serve them in a whole new way,? she said.
