Loyalty? There’s An App For That

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PALO ALTO, Calif. – A new iPhone application that lets consumers rack up reward points by simply walking into stores could give banks and card issuers the foundation for a truly mobile loyalty program.

Shopkick, the name of the application and of the Palo Alto, Calif., startup that developed it, delivers discount offers to users once they have entered a participating retailer's store and awards additional points – or “kickbucks” – for scanning specified items or trying on clothing in a dressing room, according to American Banker, an affiliate of Credit Union Journal.

Analysts said it would be relatively easy for banks to tap in to shopkick's app model. “I think, for [card] issuers, yes, there are definitely opportunities to tie their rewards capabilities with this type of solution,” said Gwenn Bezard, a research director at Aite Group LLC in Boston.

Such an offering would prepare banks “for the next stage that ultimately will be mobile payments,” he said.

Cyriac Roeding, shopkick Inc.'s co-founder and chief executive, said it is not specifically pursuing banking partners for the program, which is funded mostly by merchants, though it has worked with Citigroup Inc. on a similar application. Citi also was one of several entities that invested $15 million of venture capital in shopkick in a recent funding round.

Shopkick, in partnership with Citi, developed CauseWorld, an application that lets people earn “karma points” by visiting retailers. Users can redeem their points, which Citi partially funds from its marketing budget, by donating to charities from a list.

More than 600 stores and 100 malls are expected to install shopkick's technology in the next four weeks. The application currently is available for Apple Inc.'s iPhone, but Roeding said his company also plans to make it available for handsets running on Google Inc.'s Android operating system.

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