4 ways loyalty drives mobile shopping behavior

There’s nothing more valuable than a loyal user – but finding these consumers on mobile can be a huge challenge for many brands and retailers.  At Button’s Tap Conference in New York City, CEO Bill Demas spoke on a panel about how loyalty programs like Shopkick can be one of the best channels to acquire mobile customers that spend more, frequently.  Shared at the conference, here are 4 strategies to drive loyalty and results for brands and retailers.

Leverage location-based technology to drive timely physical conversions

Location intelligence and data are key for bridging the online-offline gap. When done right, location-based technology can be incredibly powerful for connecting brands and retailers with shoppers with demonstrated purchase intent. Yet most companies don’t have access to first-party offline location data and instead must rely on third-party bid stream data.  Less than 1% of the location data from ad exchanges is accurate enough to help marketers understand people’s movements in the real world. Even then, the most high-quality data doesn’t actually tie to store visits.

At Shopkick, we leverage a combination of geofencing/GPS, beacon/BLE and other technology to verify when a shopper enters the store with a high degree of accuracy.  We are also able to detect visits to the dressing room, or interactions with a product at shelf. This new level of precision can help brands avoid costly and opaque traditional marketing tactics, like endcap placements.

Change consumer behavior with incentives

Rewards and incentives play a huge role in the purchase journey and most consumers now expect some form of value-exchange for their purchases.  As a result, discounts, rebates, promotions and loyalty points are central to most brands’ and retailers’ marketing strategies. However, because they have become so ubiquitous, these tactics are less motivating and often end up hurting profit margins and brand equity just to drive the short-term sale.

The Shopkick ecosystem is entirely fueled by kicks, or points, that reward desired shopping behaviors.  However instead of just being rewarded for the purchase, users earn kicks for engagements throughout their journey, like browsing content and online offers, watching videos, inviting friends, walking into stores, engaging with products online and at the shelf, and making on- and offline purchases. We know this incentive model is capable of changing consumer behavior: take Lily, a Shopkick user in Houston who recently told us, “If I need to go grocery shopping and Walmart has more kicks, I’ll go there.” Offering kicks can drive the same behaviors as discounts or rebates, but cost much less for the brand or retailer.

Incorporate gamification tactics to drive re-engagement and retention

Incorporating gamification tactics into loyalty strategies can be a great way to both engage consumers to keep them active and retained, and re-engage lapsed buyers. Conventional gaming tactics like planning workflows, completing projects and levelling up makes earning rewards feel more like a game. When shoppers accomplish their goals, like reach their next reward threshold, there’s a great sense of satisfaction and accomplishment.

Another way to drive re-engagement and retention is reward them often. With Shopkick’s entry into mobile shopping, we’re now rewarding for mobile browsing and buying too, and with grocery, we’re able to keep in frequent touch, making even mundane errands a treat. Every engagement, every behavior, every purchase provides a chance to acknowledge their loyalty: beginning at the moment of consideration vs. just at the point of purchase – and continues with them along their journey.

For example we’ll message our users about upcoming milestones based on their specific behavior. If a user is saving kicks for a Starbucks gift card, we’ll alert her to reward-earning opportunities to help her achieve that Pumpkin Spice Latte. By delivering these moment of joy and fun, we’re able to drive increased brand equity, engagements and purchases.

Strategically partner with companies that elevate the user experience

In selecting partners, businesses must never lose sight of the consumer experience. At Shopkick, we have invested heavily in understanding our core customer, primarily moms who take on the heavy lifting of household shopping but also like to treat themselves. Our approach to strategic partners is always through the lens of how we can elevate the user experience. We want to match the best brands and retailers to our users and ensure our shoppers have a consistently valuable experience, from content on the platform to browsing offers to scanning products to making purchases to redeeming rewards.

As we continue to grow our product offerings, we focus on what our users want and pay close attention to their feedback. What we heard loud and clear is that our users want to be able to seamlessly shop across channels, and that primarily means shopping on mobile. We partnered with Button to be able to integrate with the mobile shopping companies that our users frequently buy, like eBay, Groupon, Boxed and Jet.com. Users are now rewarded for browsing and buying on mobile and after only 2 months, we’ve seen extraordinary results. We’re excited to expand to new verticals like travel, ticketing marketplaces, and alcohol delivery.

Navigating the complex laws of alcohol advertising

The marketing of alcoholic beverages and products can be extremely complicated. Not only must brands confirm they are marketing to consumers that are of age, but they also have to navigate different state laws and requirements.  Today, in the US, each state (and even individual counties within the states) have specific laws regulating the marketing, sale, and shipping of alcohol to its residents.

These laws date back to the period of after the end of Prohibition in 1933, when federal and state laws created a three-tiered system for manufacturing, distribution, and sales of alcohol.  First, manufacturing: licensed producers are the only entities who may make wine, beer, and spirits. These licensed producers may then only sell alcohol products to licensed distributors, and then these licensed producers must only sell these products to licensed retailers. After this, licensed retailers may then sell alcoholic products to consumers.  This system may seem convoluted today, but at the time, politicians wanted to ensure each portion of the alcohol industry acted entirely independently.  This system gave local politicians the ability to grant licenses only to producers, distributors, and sellers they deemed “fit”.

The complicated nature of these various laws can cause many companies to give up and avoid marketing alcohol altogether. However, location-based technology enabled by mobile now solves many of these challenges, and can achieve great results for marketers of alcohol.  These solutions can deliver location-specific messages and offers, by targeting consumers who live in the appropriate states and counties that allow consumers to receive incentives for scanning or buying alcohol.  To understand how complex this is, let’s look at a couple of examples:

  1. In Pennsylvania, the relevant law states “it shall be unlawful … for any licensee … to offer or give to trade or consumer buyers any prize, premium, gift or other inducement to purchase liquor or malt or brewed beverages […].”
  2. In Georgia, the relevant law states that “no Manufacturer, Producer, Shipper, Importer, Broker, or Wholesaler, nor their employees, agents, Representatives, or anyone acting on their behalf, shall directly or indirectly […] Give or offer to give […] things of value in connection with the sale of Alcoholic Beverages […and…] cooperative advertising and incentive programs shall not be deemed to constitute a [prohibited] partnership agreement.”

At Shopkick, it is our priority to understand these complex and varied laws so we may offer incentives to our consumers based on where they live, what stores they visit, and what type and brand of alcohol they purchase. Shopkick customizes each marketing program to offer incentives, specifically “kicks,” for scans of alcohol in one state and kicks for purchases in another.  So, although a consumer may live in a state where we may advertise and offer kicks for scanning an alcoholic product, we may not be able to offer kicks for purchasing an alcoholic product, or vice versa. This specialization allows Shopkick to quickly set up customized marketing campaigns for alcohol (and other products) even in the face of the complex marketing laws.

We work with many wine and spirits manufacturers across the country to navigate these laws, and have seen great results in rewarding consumers for engaging with their brands and products both online and in-stores.

Contact us to learn more about how Shopkick alcohol programs work.

How American Eagle used location technology to create magical moments for shoppers

Lars Djuvik, Associate VP Retail

The use of location based technology (presence technology, proximity technology) can be an incredibly powerful toolset for connecting brands and retailers with shoppers when it’s done right.

Whether it’s creating a virtual geographic boundary around a store to remind a shopper when they are getting near a retailer that they might want to visit, or leveraging more advanced technology like beacons to remind a shopper to take an action once they are already inside the store, there is no shortage of location based marketing tools to truly serve the right message to the right person at the right time – and at the very right place.

The power of location-based technology

These tools can both verify and inform that the shopper has actually crossed “the lease line” to their store, or visited the dressing room. They can even help the brand avoid costly endcap placements by guiding a shopper to their product regardless of placement inside the store. The right balance of where, and more importantly how frequently, a shopper should receive these notifications is the real magic for marketers when they get it right. It can be downright annoying when it’s done wrong and the ‘magic’ wears off because of incorrect location or too high a frequency of messages.

In (almost) all scenarios, location based marketing notifications triggers the shopper to open the application… which is the whole point of leveraging a mobile device in-store… enabling a dialog between that shopper and the retailer.  Both sides are winning: the shopper is getting very specific information such as offers or other calls to action, and the retailer/brand is able to communicate with the shopper in a real-time/real-place. Now that the shopper is engaged in the experience and conversation with the retailer – via the mobile app – the retailer or brand earns the opportunity to show them the next proximity based offer when it’s done right. When it’s done wrong – most notably too many messages & the wrong call to action that the shopper isn’t interested in – that conversation can and will end.

At Shopkick, we leverage geofencing/GPS, beacon/BLE and other forms of location based marketing as a means to an end. We always serve the mutually beneficial goal for shopper and retailer to keep that conversation alive by being valuable to both sides and not just serving these notifications because you can.  More important than knowing when to send a shopper a notification is knowing when NOT to show them another notification.

Our specific magic ingredient in the conversation is our location and action-taken based reward currency called “kicks” where there is always something “more” in it for the shopper than just great information.  The more they engage with the app at the right time/right place (leveraging location based technology plus great content, great brands, great retailers) they earn kicks and are incentivized to stay in the conversation.  In turn, the retailer or brand has the ability to have a dialog with the shopper throughout the awareness, consideration and action stages of a purchase.

How American Eagle rewarded in-store behavior

American Eagle discovered that once their Shopkick-driven shoppers were in-store, they could layer-on a secondary offer: giving the shopper kicks for visiting the dressing room. The shoppers would already have the app open to earn beacon-activated Shopkick currency “kicks” for walking in, initiating contextually relevant messaging.

A second in-store shopBeacon was therefore placed in the American Eagle dressing rooms.  The shopper would try-on the items and receive their “fitting room kicks” by coming in proximity of the shopBeacon.

In this example, GPS geofencing was used to inform shoppers that they were near an American Eagle store.  Once they crossed the lease-line and were inside the store – where GPS is no longer accurate – we used the first (entrance-installed) shopBeacon to verify that they were indeed inside the store – and not just “near” the store.  By verifying they were in-store they de facto had to have opened the Shopkick app which is when we gave them the next offer to visit the dressing rooms.

The key is to then incentivize the shopper to take further actions that they choose with good content, such as information or products truly customized to her or him.  In this case, the mobile app (in-store) becomes their own personalized store while they are inside the store.  A real digital overlay on the physical shopping world where they can scan product barcodes, visit a specific section of the store, and ultimately – convert – without over-messaging the shopper throughout the process.

In the end, a smart use of location based marketing made for magical moments for American Eagle shoppers, and in turn both the shopper and the retailer ‘won’ because of the location based dialog pre-shopping, near the store and in-store.