Shopkick App Lands Big Fish: Target and The Wet Seal

Shopkick, the location-based mobile rewards app, appears to be gaining momentum as the holiday shopping season cranks up, recently signing up Target and The Wet Seal. They are the latest retailers to jump on the location-based shopping app bandwagon joining American Eagle Outfitters, Best Buy, Macy’s, Simon Malls and Sports Authority in deploying the app that delivers location-based rewards to shoppers just for walking into the store.

Speaking with Cyriac Roeding, Shopkick CEO, in August, I mentioned reserving judgement but clearly, the app is being legitimized by the power retailers signing up to try it. Roeding told me last week that American Eagle installed the technology in 50 stores for starters, then chose to deploy it in another 150 stores.

Target has a pilot with Shopkick that will roll out in 242 stores in the Chicago, Dallas, Los Angeles, Miami, Minneapolis, New York City and San Francisco/Silicon Valley markets, and The Wet Seal plans to use it in more than 500 stores. Signing Target is something of a coup d’etat since it has a strict policy about third-party vendors and technologies in its stores. “We recognize our guests are connected, through a multitude of mobile and social networking technologies. Innovative mobile applications, like Shopkick, provide a fun and engaging way for our guests to connect with Target, while earning valuable rewards which can be easily redeemed for future in-store purchases,” Molly Koenst, Target spokeswoman, told me. “Target’s partnership with Shopkick is another example of how we continue to innovate in the mobile space,” she added.

In a handful of stores, Target will test special promotions when customers walk into select areas of the store, Koenst says. For example, last week Target layered on $5 off a Rubbermaid Reveal spray mop and 20% off individual holiday ornaments. When customers accumulate enough kickbucks, Shopkick’s rewards currency, they can redeem them for a Target mobile GiftCard, which can be used from within the Shopkick app. Target plans to dangle offers via Shopkick on a range of everyday items like food and cleaning supplies, electronics and toys. The chain is the only current Shopkick partner able to deliver scannable mobile coupons to customer for redemption at checkout.

The real question, of course, is whether shoppers will make Shopkick part and parcel of their lives. Downloads are one thing, usage is another. And, Shopkick is a different animal than say, Foursquare and Facebook Places, which offer consumers a chance to flex bragging rights.

Just 7.8% of retailers surveyed by Shop.org reported investing in location-based services such as Foursquare and the same 7.8% for mobile text notifications for the holiday season.

Shopkick and its partners will pay close attention to consumer interaction with the app during the holiday season. “We are offering rewards just for walking into the store. We set out to show that the app drives foot traffic and that the cost for the walk-ins is lower than the gross margin,” Roeding tells me. The capital cost for installing boxes that read a consumer’s smartphone signal when they enter the store is $100. Typically, a retailer needs one for each entrance.

Shopkick is experimenting: “We have recently, for example, doubled the rewards or kickbucks you could get for walking in from 75 to 150. We did it to measure the impact. The most tangible result is that American Eagle added more stores.” Doubling the kickbucks significantly increased foot traffic, Roeding says. He adds that retailers can and should layer on promotions on top of the walk-in rewards. For example, American Eagle offered extra kickbucks when customers scanned the barcode on a poster in the fitting room.

The draw for shoppers–they earn “kickbucks” each time they walk in the store and can spend them anywhere. During the holiday season, Roeding expects retailers will offer special deals on top of the kickbucks apps users earn for entering the store.

In addition to its availability on the iPhone–the App store is promoting it on the home page. The app launched on the Android platform on November 18. Google is promoting it on the Apps Marketplace. Next up: Look for a huge promotion from Shopkick and its participating partners on Black Friday.