Case Study: Sports Authority Engages Customers With Location-Based Rewards
Sports Authority wants customers to do more than just check-in on location-based apps. Vice President of E-commerce Clay Cowan says the national retailer’s goal is for customers to be actively engaged in the stores they’re visiting. Sports Authority has partnered with Shopkick and Foursquare to reward customers with gift cards and discounts for checking out specific products and using preferred credit cards, like American Express, to pay for purchases.
Tell me about the location-based platforms that Sports Authority is working with right now.
The latest news is that we are rolling Shopkick out nationally. We ran a pilot launch program with them a year and a half ago. Now we’re going from a hundred or so stores that have a Shopkick [program] in them to the full chain. We’re really excited about that.
How does your promotion with Shopkick work?
Shopkick is a very retail-focused social network and location-based platform. I don’t know if you want to call it a game, but it’s a location-based social network with a gaming mechanic built into it. Basically, it makes a pretty engaged customer base for doing things like checking in at our store. We partnered with our vendor partners to have [customers] interact with different items in the store. Like, “Go check out the new Adidas soccer ball,” or “Check out the latest New Balance sneaker,” and they’ll interact with the item and get credit on the gaming mechanic for doing that. [Customers] redeem the points—called Kick Bucks—for gift cards and things of value.
Do the rewards vary?
Absolutely. If you’re just within the proximity of a store or if you walk into a store, you get a certain amount of points. We have transmitters in the stores that interact with the application and the phone, and if you interact with certain items in the stores then there’s even more points. It’s different levels of engagement for different customers. The customers seem to really like it.
What has the response been like since you rolled out the Shopkick program nationally?
We see thousands [of check-ins] a month. I can’t be more specific than that, but we see good traffic. Even more than that, we see really engaged traffic. It’s not just a token check-in, people are doing things around the stores. That’s been good, and in terms of ability to do innovative partnerships, they’ve been really great to work with. In terms of what can we do if we’re launching a private label, or if we’re launching a new line with New Balance, or Adidas or Nike, they’re just really innovative partners; they’ve been a lot of fun.
Are you still running a promotion with Foursquare, as well?
We’ve been partnering with Foursquare deeply for a long time, starting with our “check-in to win” program that we did on Black Friday of last year. [Customers] checked-in and had a chance to win a $500 gift card in real-time. Our customers loved that. The most recent thing we’ve done is partnering with Foursquare and AmEx for a deal where you link your AmEx with your Foursquare account. If you check-in and buy things with your AmEx card, then there’s a statement credit that [rewards] you for that. It just shows up for the customer [on their next statement], which makes it super easy for the customer to get credit for shopping with us.
The AmEx/Foursquare promotion that was scheduled to end in August is still going on. How long are you extending it for?
We haven’t said. But it is still going to be in the marketplace, for sure.
I assume that means it’s going well.
Well, you know, all of these things are in the early stages, but we certainly don’t continue things that are failing.
Have location-based check-ins translated to more sales?
We do see these people come through the checkout [lines]. I think there is still the question in terms of incrementally—is this actually an additional sale? But with the user base being young and pretty tech-savvy, which is an attractive user base, you have to believe that at least some of those are new customers.
What challenges have you encountered with LBS?
I certainly wouldn’t say that we’ve cracked the code. I think we have a culture of experimentation [at Sports Authority]. That has given us the ability to put a lot of birds in flight and see what happens. It’s just us wanting to try a few things, as opposed to us having [an idea] fully baked before we launch it.
How much involvement is required in the LBS deals you’re offering?
Some programs are lighter touch than others. We do location-based stuff with AmEx and Foursquare that’s largely turnkey. We partnered with them and they’ve been great. If we get more involved with Shopkick and want to do things in different regions or do things with a vendor specifically, that [is going to] require a little more bandwidth on our side. I think there’s a wide spectrum on how much involvement is required.
Where do you see LBS going in the future for retailers?
I don’t think it’s sorted out if there’s going to be a single winner or if there are going to be multiple offerings. Today, there are multiple payment options for customers, but it’ll be interesting to watch how that plays out. Right now Google is launching Google Wallet, and that might have a location-based angle to it. People are using their phones to pay with and check-in with, and you can imagine the wireless providers playing in this game a little bit. Obviously the guys who are in the payment space are going to have a point of view on how this shakes out.
This interview has been edited for length and clarity.