Following Acquisition, Shopkick Posts Some Big Numbers
It’s been a busy few weeks for Shopkick. Last month, the retail shopping app was acquired by Korea-based wireless company SK Planet for about $200 million. This morning, Shopkick announced it has driven more than a billion dollars in revenue to its retail partners — more than half of it in the last 12 months.
Shopkick offers user rewards called “kicks” to shoppers who use the app while they’re in a partner store. The company uses fist-sized beacons to communicate with shoppers via the app. So far there are just over 7,500 shopBeacon devices installed in 3,000 stores across the U.S. including retail giants like Macy’s and Best Buy.
“If you’re in Macy’s and you’re visiting different parts of the store, you can now actually be rewarded for visiting certain parts of the store that otherwise you would never visit,” said Shopkick CEO Cyriac Roeding. “A small reward like that can cause such a behavioral change.”
Over the last several months, Shopkick also installed shopBeacons in about 100 American Eagle locations. Roeding said the American Eagle rollout exemplified the app’s power to influence consumer behavior.
“In the case of American Eagle, we offered a really small incentive, like 25 kicks (equivalent to about 10 cents), to visit the fitting rooms,” said Roeding. “We also gave them 50 kicks just for walking in the store. We saw a doubling of the percentage of people that walked in from the entrance to the fitting room compared to the people who did not get that incentive.”
According to Roeding, Shopkick has 20 times more beacons installed in retail locations than any of its closest competitors. He believes Shopkick’s early success and rapid growth shows it could fundamentally change the way retailers look at hyperlocal marketing.
“We’re already far ahead of where we were last year,” he said. “The best example of that is American Eagle, where we really proved that the combination of a virtual rewards currency with the technology like Shopkick is a killer combination.”
In addition to the money, Roeding expects Shopkick’s growth to be accelerated by SK Planet’s experience with mobile marketing.
“It’s a significant boost for us because it was over a $200 million cash acquisition,” said Roeding “For us, we have a partner now behind Shopkick that is very large with very significant resources. And we are their launch pad in the U.S. They’re the largest player in South Korea for mobile commerce.”
Roeding envisions recreating the SK Planet’s success in the US. He said that in a nation of 50 million, SK Planet’s shopper rewards program has 38 million people in their loyalty program. He pointed out similar results in the US would mean 210 million people using Shopkick. He said it could happen soon.
“The only thing that keeps surprising me is how fast the rollout can happen,” said Roeding. “The devices can simply be stuck against the wall with special duct tape, and the battery lasts five years. You can roll out an entire chain with Shopkick in four weeks.”
Mason Lerner is a contributor to Street Fight.