Shopkick: Checking In Before Checking Out

The latest entrant in the blurring of boundaries between the physical and the virtual worlds is Shopkick. It’s an app that lets retailers know when a customer enters a store — not when they make a purchase, but when they cross the threshold and physically enter the store.

Just for allowing their physical location to be registered — and not in a Minority Report, Big Brother-is-targeting-you sense, either — there’s a system of points or discounts as incentive.

Shopkick is different from Foursquare, Gowalla, Loopt and other location-based apps. As Techcrunch notes, it identifies and rewards only actual customers. Unlike other services which rely on GPS or Wi-Fi signals, Shopkick installs in-store devices that send an inaudible noise that’s picked up on a smartphone microphone through the app.

So, while Foursquare’s automatic check-in service counts anyone within 300 meters of a location, Shopkick only works once the customer is in the door.  “Check-ins are a really nice start, but unfortunately, most of them are fake,” comments Cyriac Roeding, a Shopkick founder, to the New York Times.

Best Buy and Macy’s are partners and there are several options once you cross that thresh-hold for earning points – with or without a purchase – which Shopkick calls ‘kickbucks.’ Shoppers give their cellphone number at the cash register to redeem rewards.

So far limited to New York, Los Angeles, San Francisco and Chicago, the app's rewards system (dubbed kickbucks) can be collected not only for entering a store, but also for scanning products inside. They can be redeemed for gift cards, iPads, Napster downloads, donations to causes, Facebook credits, and more.

The retailer decides how much each customer is worth and what they want to offer, turning pay-per-click into pay-per-customer. Shopkick, naturally, also earns a cut. “For the first time in physical retail, marketing costs are 100% performance-based,” says Roeding.

Allowing Shopkick’s in-store installation of their device is a challenge and a bigger commitment than monitoring a Foursquare app. But it’s an attractive commitment according to Margita Labhard, director new business customer solutions for Best Buy, as Shopkick is a shopping app rather than a social app.

“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 comments.

Or as Shopkick notes, “What if you could flip on a switch and turn offline stores into interactive worlds, using your smart phone?”

Tell us: would you, or your customers, feel comfortable participating?