Shopkick, a mobile startup that is sort-of a "Foursquare for shopping," is finally starting to share some of its growth statistics. And they're impressive! Click the following image to learn how Shopkick works.
First, for quick background: Shopkick works with big retailers including Best Buy, American Eagle, Macy's, Target, and others, offering access to special deals and allowing users to collect points called "Kickbucks," which are redeemable for real-money rewards, like gift cards.
You earn points for walking into participating stores -- verified by a special beacon in each store -- and for scanning barcodes within stores, as instructed by the app. The main idea is to get more people to walk into stores more often, so they'll consider buying something. Shopkick only gets paid when it brings people into the store, and when people buy stuff using a Shopkick deal.
Now, for the stats...
Shopkick, which launched last August, has attracted 750,000 users through January. That's up from 530,000 users at the end of December, and 280,000 at the end of November. That's smaller than Foursquare, Facebook Places, etc. But it's solid.
Some 10% of Shopkick users are active on a daily basis; 20% on a weekly basis, and 40% on a monthly basis. Shopkick also says it retains users 6-7X better than average lifestyle apps.
Shopkick is doing 1 million "check-ins" per day. (In much shorter time than it took Foursquare to reach that level of activity.)
But Shopkick isn't really about check-ins -- it's about generating foot traffic to retail stores, so people might consider buying something. ("Check-ins" and "walk-ins" are separate stats; "walk-ins" being worth much more than "check-ins," which are worth very little.)
So how is that working?
Shopkick won't say how many walk-ins it's doing a day for the 1,100 stores and 100 malls in 18 markets that it's installed in.
But 20% of all Shopkick users who live in an area with Shopkick walk-in rewards have already walked into a store with the app on, Shopkick CEO Cyriac Roeding tells us. ("We expected 2%.")
Roeding also says that Shopkick has discovered one way to reliably increase in-store walk-ins -- by boosting the Kickbucks walk-in rewards that Shopkick users would get when they walk into the stores. (We've noticed that these promotions also tend to come with an iPhone push notification, which announces the deal. That may help too.)
One of its retail partners increased Shopkick walk-ins by 68% on Cyber Monday (an online shopping day) over Black Friday (an offline shopping day) by tripling its walk-in Kickbucks reward for the day.
And, on average, these experiments with five different retailers have boosted Shopkick walk-ins by 50% to 100%. Roeding says, "We expected 5%, and retailers would have been happy about that."
This is important because tripling Kickbucks awards only costs the retailer about 50 cents to $1 -- which can very quickly pay for itself as people start shopping. Roeding has told us in the past that a transaction lead in specialty retail is generally worth $10 to $15.
Retailers seem to have nice things to say, too, via today's WSJ profile on Shopkick and other mobile shopping apps:
"It definitely drove traffic into the stores," Sports Authority CMO Jeff Schumacher told the WSJ. Sports Authority is extending Shopkick into all of its stores now.
And a Best Buy rep tells the WSJ that "'the return is really positive' given the cost of implementing the system," adding that many Shopkick users seem to be redeeming their Kickbucks for Best Buy gift credits -- a win-win for the chain.
So it looks like Shopkick is actually doing well!
While it doesn't get as much attention as Groupon, Foursquare, and Facebook Places, it seems to be doing good work -- so far, at least -- for its initial retail partners. The actual numbers -- walk-ins, purchases, revenue, etc. -- are still probably small. But retailers are going to be investing heavily in mobile, so Shopkick is in a good position to continue winning deals.
Chains may develop their own apps, too, but will they also build out entire rewards platforms like Shopkick's? They may try, but most will probably do a bad job. So there may be a good reason to work with an aggregator like Shopkick.
Looking ahead, we'll have to see how Shopkick can continue to grow and evolve as Facebook and Foursquare push deeper into the mobile deals and rewards areas. And, further in the future, as mobile payments -- not just deals and rewards -- become part of the equation. Starbucks has taken the lead there, and Google and Apple seem to be preparing their products for launch.
COMMENTARY: Shopkick impressed me so much with their unique in-store location-based check-in technology, that I profiled them back on November 15, 2010 in an article titled, "Will Shoopkick's Game-Changing Mobile Rewards App Become The New Paradigm In Location-Based Check-In Services?" and again on Noverber 22, 2010 in an article titled, "Shopkick Puts Its Location-Based Shopping Rewards Service To The Test With Its '12 Days Of Kickmas' Holiday Promotion".
Shopkick's statistics are very impressive when compared with other location-based check-in services:
- Foursquare - 6.5 million users at the end of January 2011 and claimed it had 2 million check-ins per day. This is an average of 30.77 daily check-ins per user. You can include me in that tally, because I use foursquare myself.
- Facebook Places - Facebook has always been stingy and secretive with their statistics, but in an article dated October 29, 2010 appearing in SAI Business Insider, a source within Facebook reported that 30 million people had used Facebook Places, and that 150 million users were accessing Facebook on their mobile devices. Just a guess, but I am estimating their average daily check-ins at 9.2 million (30 million users x 30.77 daily check-ins). However, we don't have Facebook Places' current user count, so that number could be easily double that.
- Gowalla - On February 11, 2011, The Next Web reported that Gowalla was on target to reach 1 million users by the end of February 2011, and that those users had so far created and visited over 2.5 million locations or "spots" throughout the world. In an article dated November 15, 2011 titled, "Major Coup: Disney Teams With Gowalla To Provide Location-Based Check-In Services For All Of Disney's Parks And Resorts", I reported Gowalla had partnered with Disney to provide location-based check-in services for all of their amusement parks and resorts. The number of visitor's for Disney's three largest amusement parks are as follows:
- Walt Disney World's Magic Kingdom (Orlando, FL) - 17.2 million visitors
- Disneyland (Anaheim, CA) - 15.9 million visitors
- Tokyo Disneyland (Tokyo, Japan) - 13.6 million visitors
Shopkick's average daily check-ins per user works out to 1.333. This is roughly 4.33 times higher than Foursquare and Facebook Places (see my estimate above). By any measure, that's quite an impressive number.
While foursquare hands out badges for check-ins (I have three now), Shopkick keeps shopper's engaged and loyal by rewarding them "kickbucks", which accumulate and can be later redeemed like cash for real merchandise in a Shopkick participating store. According to an interview with Shopkick's CEO Cyriac Roeding,
"Fifty-seven percent of more than 15,000 respondents said that walk-in rewards entice them to visit partner stores more often. Even more surprising, 35 percent said they have already purchased something while visiting that they wouldn’t have purchased without using shopkick."
And, therer's more,
'The most important consumer behavior is probably usage intensity. Users generate thousands of walk-ins per day, more than 1.3 million check-ins per day, and since launch a total of 3.7 million product scans. That is a six times faster growth than any other new location-based app. Best of all, it’s all related to actual shopping, not only to social activity.and he goes on to say,"
Both Facebook Places and foursquare face a gender gap, with males outnumbering females 2-to-1, and this must be addressed.
According to Shopkick's CEO Cyriac Roeding, Shopkick's demographics are as follows:
"Our users are an ideal demographic for retailers: they are shoppers. Fifty-five percent are female, and 49 percent are 25-39 years old. Ninety-two percent are between 18 and 60 years old. It’s the perfect shopper demographic. This is different from most location-based apps, of which 80 percent of users are 18-29 year old males."
Judging from the above demographics, I would say that Shopkick has conquered the gender gap (55% are female) and their users are the "perfect shopper demographic".
Shopkick's CEO also says,
"We hear from retail partners that work with both shopkick and others that in comparison our users drive more revenue, bigger baskets and margins – even though some other location-based apps are 5-10 times larger."
I would say that Shopkick's location-based check-in model is much more effective, increasing participation and loyalty, and more importantly, capturing a larger share of the consumer wallet for each participating merchant.
Shopkick's results are even more impressive when you consider that they are based on a limited number of participating retail brands and shopping centers. From the looks of things, I would say that they are filling a real need in the marketplace, have a superior LBS check-in technology, and their successful business model now needs to be scaled by adding more retail merchants and increasing user enrollments.
Go Shopkick!
Courtesy of an article dated January 31, 2011 appearing in SAI Business Insider and an article dated March 2, 2011 appearing in Blog.Shop.org
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Posted by: mfbpzk | 06/21/2011 at 02:55 PM