Shopkick Proudly Re-Creates Black Friday Foot Traffic, But Did It Deliver Revenue?
Written by Evan SchumanMobile check-in firm Shopkick last month tried an experiment in which it wanted to re-create the foot traffic of Black Friday, on a random day where there existed no special sales. The effort, where double points were offered to walk-ins, seemed to succeed in delivering the crowds of Black Friday but not, apparently, the sales. It was the perfect mobile marketing metaphor.
To be clear, what Shopkick said it did is quite impressive. It created what it dubbed “Black Friday 2” on Friday, Feb. 24, a day chosen to represent a “normal, non-peak shopping day.” And by doubling the kicks—Shopkick’s incentive points—it said it delivered the largest walk-in day ever for its participating partners, including American Eagle, Best Buy, Crate & Barrel, Macy’s, Old Navy, Toys’R’Us and Wet Seal.
Shopkick CEO Cyriac Roeding even stressed—paradoxically enough, for the vendor CEO—how low-value those kicks are. “So we offered about double the kicks to users for walking into any Shopkick partner alliance store and that was still worth less than a dollar,” he said. The magic behind the value placed on those kicks is something retailers—such as Target—are still trying to master.
To what end, though? Are these shoppers who went to the local large mall and simply hit store after store to accumulate the points? The much more meaningful figures would have been sales numbers, to indicate that this rush of manipulated foot traffic did something beyond running to the next store, until their mobile phone heard the Shopkick tone, registered points and moved on.
Shopkick argues that the value of its service is that it delivers the people to the store. To a certain extent, that’s true, aside from people who game the Shopkick system by visiting Web sites that re-create the audio tones and barcode scans to trick Shopkick into thinking that a shopper is in the store when he/she isn’t.
That does make this statement on Shopkick’s news releases rather disingenuous: “Because Shopkick is able to detect actual presence inside stores, partner retailers ensure that marketing dollars put into the Shopkick program are being spent to reward customers who are actually present in the store, translating into higher value rewards for the shopper. Presence detection is something not possible with traditional location-based applications, which rely on GPS technology that has a typical error radius of 500 yards on mobile phones.” The reality is that Shopkick’s app can be fooled, just like all of the others. Shopkick uses a variety of techniques to minimize such fraud—such as making sure that the shopper had enough time to have gone from Store A to Store B and that it’s not done when a store is closed—but let’s not pretend that fraud never happens.
-Marc
March 15th, 2012 at 11:13 pm
Aaron from shopkick here.
The inspiration for “Black Friday 2” came from seeing the success our individual retail partners have had driving dramatic increases in their foot traffic using special incentives for shopkick users to walk into their stores. This inspired us to wonder what would happen if the power of the entire network of shopkick partners could be harnessed together.
The results exceeded our expectations. Not only did we see the remarkable increase in foot traffic from our users that has already been reported — more than 3x a typical Friday, and higher even than the “real” Black Friday — but we also saw a corresponding increase in sales. Evan astutely points out that the effect of this program can be seen immediately as increased purchases at those retail partners that offer rewards for credit card purchases through the shopkick “Buy & Collect” program. Although I obviously can’t share the exact revenue numbers, we saw irrefutable results in the Buy & Collect activity, as well as our other measurement tools, that showed irrefutably that our users not only visited stores more because of the promotion, but bought when they were there. We drove over $110 million in revenue for our retail partners last year, and Black Friday 2 was a great illustration of how that happened.
Bottom line: Black Friday 2 was a real success, because it provided yet more proof that marketing money spent through shopkick translates directly into sales, with great ROI, and most importantly, because our partners and our users all benefitted from it.
March 20th, 2012 at 11:18 am
I think that this is an example of the need to have clear goals with any marketing plan. From what I can read the goal was to increase the foot-traffic to be the same as Black Friday. It sounds like the error was in calling in Black Friday 2, which implies Black Friday sales, which this program was unlikely to reproduce.
Black Friday is built around offering a series of promotions that drive the customer to the store. They are there to save money on purchases (purchase intent) and hopefully purchase more than they intended while they were there. Black Friday 2 was built around getting them to the store, NOT with a purchase intent. Two completely different marketing goals.
What would have been more interesting, and I hope Shopkick tries again, is working with their partner stores to offer in-store promotion tied to the Shopkick event. Hopefully they can convince their partners to try different promotion strategies to see which worked best. What happens when a similar event is tied to an existing promotion? Can Shopkick magnify it?
Santa and the Easter Bunny bring people to the mall too. Do we measure how much they impact sales? Which has a better ROI? =)