Location-based shopping app Shopkick has confirmed that it generated more than £110m in revenue for its retail and brand partners in 2011 – its first full year in use.

Launched in August 2010 as a location-based loyalty scheme, users simply install the free Shopkick app and it registers every time they enter a physical shop.

People can then collect ‘Kick rewards’ for these visits, and extra points for interacting with a product, which can then be turned into credit or used against special deals.

In November, Shopkick announced a partnership with Visa that allowed retailers to create in-store offers that provided extra 'Kick rewards' for spending over a certain amount.

The company said it has now more than 3m active users, is in use at 11 national retailers, several entertainment ‘entities’ and more than 4,000 shops in the US.

This is not only good for retailers, since it drives offline footfall, but also for consumers. In a release sent out today, Shopkick said that people don't switch wallets or outfits going from the grocery store to the mall, so assuming they'll want separate apps for the various ways and places they shop ignores consumer preferences. The Shopkick app aims to remove this problem by providing something that covers the entire purchasing path.

Shopkick CEO Cyriac Roeding says that some mobile services drive people out of stores, not into them, with online comparison shopping that turn stores into 'showrooms'.

Shopkick does the opposite. It drives people into stores by rewarding them with things they love just for visiting. It's a win-win-win between retailers, brands and consumers."

In May the company unveiled a program that allows users watching certain TV shows to unlock exclusive deals when they use their app during commercials. This speaks to research released by the IAB today, which suggests that nearly 50% of smartphone owners use their mobile to search for product information after seeing a TV ad.

Plus, the survey also found that 38% of respondents used their smartphone in-store while shopping, with 49% of this group using their mobile to compare prices with other retailers.

Though Shopkick requires each retailer to install a signal box in each shop it wants to include in its Shopkick scheme, this is a smart way to combine location with smartphone use, deals and incentivisation. 

You could create a similar programme with Foursquare or Gowalla, probably at a lower cost, but that would be reliant on a consumer checking-in to activate such a reward scheme. Shopkick requires no action from the user, it simply collects data on which shops you’ve been into – and then offers extra rewards if a person wants to collect more points more scanning a barcode or such. 

Vikki Chowney

Published 31 January, 2012 by Vikki Chowney

Vikki is head of community at TMW. You can follow her on Twitter or Google+

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