Shopkick, Simon Properties Planning Location Based Coupons

Mall retailers are hoping to entice shoppers to walk into their stores by arming them with mobile rewards and coupons on their smartphones. The country's largest mall operator, Simon Property Group, of Indianapolis, Ind., which owns 370 shopping centers nationwide, is partnering with tech start-up Shopkick, to deliver ads and coupons to shoppers by the end of August.

The mobile marketing initiative will start with 25 malls in New York, Chicago, Southern California and the San Francisco Bay area, Simon Property said. Consumers can already "check in" at restaurants, retail stores and other physical businesses to accumulate virtual points with applications such as Foursquare and Loopt, which use Global Positioning System technology to figure out a user's location. Instead of using GPS, though, Shopkick's application depends on small speakers that retailers need to install at the entrance to their stores or mall. Cell phone microphones will pick up an inaudible sound emitted by the speakers. The store is identified by a code contained in the sound and automatically checks in a customer coming through the door.

Because the sound doesn't travel too far, Shopkick's transmitter system guarantees that customers are in the store, according to Cyriac Roeding, co-founder and CEO of Shopkick. Generic offers will be given out initially, but the more frequently customers use Shopkick, their preferences will be tracked by the technology and they will receive more customized offers.

The Shopkick app is available for iPhones and Android devices. Customers need to give the cashier their mobile phone number in order to redeem their coupon. While some customers may have balk at giving out their cell phone number to redeem their coupons, Mikael Thygesen, Simon Property's chief marketing officer, called the program a win-win for both retailers and shoppers.

According to a Forrester Research study done about a year ago, smartphones were being used primarily for texting, checking news sites and playing games. Less than 20% of web shoppers had smartphones and only 30% of them were using their devices to make purchases.

Macy's will also test the app in over 150 stores in New York and San Francisco, the retailer said. Best Buy is also planning to launch the program in markets including San Francisco.

FURTHER READING:

-- Full Nelson: Shopkick And Novitaz Aim To Drive Rich Retail Experience