Businessweek.com published an article about a interactive shopping “app” for smartphones called "Shopkick."
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The article documents Aaron Emigh, Shopkick’s Chief Technology Officer, challenge with the task of figuring how to locate customers in the store accurately. In an article from entrepreneur.com, the CEO and Founder of Shopkick states, “If you want to reward someone for walking in your store, you cannot use GPS. It's way too inaccurate. There's an error radius of about 500 yards, meaning I still don't know if you're inside the store, out in the parking lot or across the street at a competitor” (Ankeny). Emigh developed an innovative software that produced an audio signal that directly connects to a smartphone with the Shopkick app open. Automatically, the retail stores using Shopkick software knows when a Shopkick customer is in the store. Shopkick rewards customers with “Shopbuck” for walking into the store, scanning recommended items, and buying a product with a Visa card.
The groundbreaking use of sound waves allows Shopkick to enhance their spectrum of information regarding consumer activity. Commonly, companies that use data mining use the information gathered from RDIFs. Unfortunately, the scope of information gathered from RDIFs rely on a customer’s use of the RDIF such as swiping a credit card. The unique aspect of Shopkicks software is its recognition of a Shopkick user’s general presence in the store. The Shopbucks given out at participating stores gives costumers an incentive to shop at one store over another. “Sports Authority, for example, was able to get 50-70 percent more walk-ins by increasing the amount of kicks it awarded to Shopkick users. By ensuring that a consumer is present, the app allows merchants to engage directly with their customers, and to reach out to them with offers and rewards based on loyalty” (Kim).
The valuable information gathered about consumer shopping patterns will allow for more sophisticated data mining to take place.The business intelligence side of participating retail corporations will depend on the data Shopkick records, and they will be able to use that data to create business strategies to focus on optimizing revenue. The possibility of being able to predict when, where, and what people will buy will cause a wave of companies to convert to Shopkick.
To expand their network of companies, Shopkick is targeting smaller businesses by decreasing costs of the hardware. “In a deal with Shopkick investor Citi, the company is offering free installation of Shopkick signal boxes at 1,000 stores owned by local merchants” (Kim). Shopkick plans to continue their expansion to interconnect all consumer stores of all sizes and encourage a revival in retail shopping.
Featured Article: http://www.businessweek.com/articles/2012-08-30/aaron-emigh-rewarding-shoppers-with-a-silent-signal