Shopkick, an almost year-old check-in/rewards app for shopping, has been very successful so far getting big, nationwide chains to use it: Partners include Best Buy, Target, Macy’s, Crate and Barrel, etc., and it has signed up almost 2 million users.(Want more background info? Click here to learn how Shopkick works.)
Now Shopkick is making a push to try and get thousands of small businesses to participate, and it’s partnering with Citi — one of its investors — to launch its effort.
Along with Citi, it’s going to offer free installation to its first 1,000 small business partners in 10 launch cities: Austin and Dallas, Tex.; Chicago, Ill.; Detroit, Mich.; Los Angeles and San Francisco/Bay Area, Calif; New Orleans, LA; New York, NY; Seattle, Wash; and Washington D.C. (Merchants can sign up here.)
What’s getting installed, anyway?
A small box that sits in the store and emits an audio signal: That is how the Shopkick app verifies that you are actually inside the store, which is required before you can earn Shopkick points.
Shopkick points can be redeemed for real-money rewards, so merchants insist on making sure you’re actually inside the store, not just “checking in” from wherever, before you can earn them.
(The whole point of Shopkick is to increase foot traffic into stores — and therefore increase the store’s revenue — so requiring that a store uses a Shopkick beacon to verify check-ins is the company’s way to make sure people actually walk in.)
Will it work?
It’s easy to see why Shopkick wants to go after local small businesses: They represent the majority of the nation’s retail stores, and small businesses can probably use the help that Shopkick can offer. They are far less likely, for instance, to have their own IT divisions that could make their own iPhone and Android apps.
But it will be very challenging.
Shopkick is a mostly engineering-focused company — based in a small office in Palo Alto above a Chinese restaurant — that’s had its success making a few, huge biz-dev deals. It’s not yet a sales company, and dealing with thousands of small-business partners doesn’t scale as nicely as dealing with a handful of huge, nationwide partners.
Groupon, a quasi-competitor, has shown that an Internet company can get small, local businesses to participate in web deals. So it’s a good idea for Shopkick to try this — it could eventually become very lucrative. But Groupon also has thousands of salespeople around the world, which Shopkick doesn’t.
So we’ll see how it goes. If Shopkick can successfully get local merchants signed up, it could solidify itself as the go-to app for shopping and rewards. But it could be a messy process. And eventually, it could involve a total transformation of the company’s structure, including hiring hundreds of sales and support people.
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