Retailers, Mall Group Sign on to “Walk In, Win Points” Mobile App

Four major retail brand names and the largest U.S. mall property group have agreed to become the first clients of a new location-based shopping app that gives smartphone users points for just walking through the door.

In an announcement this morning, smartphone rewards start-up Shopkick announced that American Eagle Outfitters and the Sports Authority would become part of the first group of retail brands to deploy its technology. Last week the Palo Alto CA-based company revealed that Best Buy, Macy’s and the B-to-C arm of the Simon Property Group would also install Shopkick technology later this year.

The new platform awards rewards without requiring users to check in proactively the way they do on Foursquare, Gowalla and other location-based services. Instead, users download the free Shopkick app to their smartphones and turn it on as they near the mall or retail outlet.

As users cross the threshold, their handsets will pick up an inaudible audio signal coded for that store, and their reward points will automatically be transmitted via their phones. Participants can use their Shopkick “Kickbucks” to redeem for online rewards such as Facebook credits and song downloads; depending on the retailer offer, they can also use them for magazine subscriptions, donate them to charity, or trade them in in-store for gift cards.

“Our forward-looking retail launch partners are shaping the future,” Shopkick co-founder and CEO Cyriac Roeding said in announcing the new partnerships. “They bring personal rewards and offers to shoppers just for visiting. When you walk into a Macy’s, Best Buy, American Eagle Outfitters or Sports Authority store, or you walk into a Simon Mall with your Shopkick app, it will say, ‘Welcome—you just collected Kickbucks.’”

According to the company, Shopkick’s virtue compared to other location-based networks is that it can actively, accurately detect when a shopper has walked through the door and reward that traffic. Other networks either use satellite-based GPS to pinpoint users—an approach that won’t work inside structures like enclosed malls and can be off by 50 to 1,000 yards—or ask users themselves to check in for points rewards, which can sometimes be done without entering the store, leading to false reports.

“Until Shopkick, nobody has been able to crack the problem of the last few feet,” Roeding said in an interview. “The accuracy of knowing whether they’re inside your store makes all the difference, because now it’s economically feasible to reward consumers for being in the store. Without that accuracy, you might be rewarding someone for being in the parking lot—or worse, next door at your competitor’s. We help solve the number one problem brick-and-mortar retailers have today: generating foot traffic.”

The retailers and property owners signed on to Shopkick now say they will also use the program to reward shopper behavior beyond simply walking across their store thresholds. For example, American Eagle Outfitters will reward shoppers for actually trying on clothes and then using the Shopkick app to scan a barcode n the dressing room. Best Buy and Macy’s will push specific discount offers to Shopkick users and guide them to specific departments within the store to learn about products, scan in barcodes and earn extra reward points.

Meanwhile Simon Brand Ventures, the consumer division of Simon Property Group, will not only install Shopkick transmitters in 100 of its U.S. retail malls by the end of 2010 but will also promote the platform among its retail customers.

“Mobile marketing is for us an important new channel and an area of particular interest,” says Mikael Thygesen, president of Simon Brand Ventures and CMO of SPG. “After a year of due diligence, we decided that Shopkick had the most compelling business model by far, and we decided to get behind them and support their launch.” Simon will deliver the Shopkick application to 100 mall properties in time for the 2010 holiday shopping season.

The concept of rewarding shoppers for actual real-life behavior makes Shopkick a performance-based mobile marketing app, says Roeding. Just as companies only pay Google or other search marketing providers for the clicks on their search ads, retailers will pay Shopkick only for the number of users who turn on their apps and enter the stores. Shopkick will also earn revenue from every item purchased by app users via a Shopkick discount offer or promotion.

Best Buy will go so far as to integrate Shopkick into the point of sale system in 257 of its U.S. stores by October 1, so that it can push special offers and discounts to app users and allow them to apply those rebates directly to their purchases simply by giving the cashier their cellphone number.

Future potential includes the ability to link shopper loyalty cards to the Shopkick app. While the app is currently available only for iPhones, Roeding says the company expects to make an app available for the Android operating platform within weeks.

All the retail brands in this first wave of partnerships with Shopkick will concentrate their initial rollout efforts in the major markets of New York, San Francisco, Los Angeles and Chicago.