Helping shoppers get their kicks

Amidst the recent hysteria about the rise of online and the demise of offline shopping, one point that often gets missed is that of conversion rates. 

Physical retail is far more successful at turning traffic into sales. Depending upon the research source, the conversion rate for bricks and mortar stores is a minimum 20% (much, much higher in the grocery category), while online is a maximum 3-5% (and some quote far lower numbers). Think about your own experiences.
Amidst the recent hysteria about the rise of online and the demise of offline shopping, one point that often gets missed is that of conversion rates. 

Physical retail is far more successful at turning traffic into sales. Depending upon the research source, the conversion rate for bricks and mortar stores is a minimum 20% (much, much higher in the grocery category), while online is a maximum 3-5% (and some quote far lower numbers). Think about your own experiences.

The fundamental idea is that Shopkick users earn points (called “kickbucks”) for interacting with a bricks and mortar outlet – a minimum number of points for “checking in” outside the shop, more points for walking in, and more points again for trying a product (eg putting a garment on or squirting on some perfume). The higher the level of shopper engagement, the greater the reward.

OK, you’ve read about “rewarding customers for checking in” before (in fact I wrote about the subject last year). But one key difference between Shopkick, and say FourSquare or Facebook Places, is that the system doesn’t need GPS technology, which can prove inaccurate. Shopkick instead uses a small box, plugged into a power outlet, which emits an inaudible sound that the shopper’s smartphone recognises. Another differentiator is that Shopkick is not a social app; it’s purely about shopping.

According to an interview with Roeding on blog.shop.org, Shopkick is gaining real traction. Since launching in August last year, Shopkick has attracted over 1 million users, 55% of whom are female, and 49% aged 25-39. Each day, those users “check-in” to stores 1.3 million times, and walk in on thousands of occasions. An article on website Business Insider quotes that 20% of Shopkick users are active on a weekly basis, 40% monthly. And in the Wall Street Journal, a representative from electronics chain Best Buy (which is successfully using Shopkick) said that “the return was really positive”.

Shopkick is an example of how retailers might harness the power of the Smartphone for good, rather than evil (eg scanning products in store and carrying out instant price comparisons). It allows shoppers to “get their kicks” while the store gets the sale.

Jon Bird is CEO of specialist retail marketing agency IdeaWorks (www.ideaworks.com.au). Email jon.bird@ideaworks.com.au. For more retail insights and inspiration, visit www.newretailblog.com.

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