ExxonMobil Eyes New Loyalty Offer
Published in CSP Daily News
"shopkick" rewards customers just for walking in
IRVING, Texas -- Discount deals may be nice, but they don't necessarily generate repeat business. Now Exxon Mobil Corp. plans to launch a pilot test of a mobile application that will award consumers points just for entering a store, CSP Daily News has learned. A consumers earns more points if he or she scans a product's bar code or purchases the item.
The phone app is called shopkick, and 11 national retailers and more than 30 large brands are part of its alliance, including Home Depot, Target, Macy's, Toys R Us, Old Navy and Best Buy, along with Gerber, Procter & Gamble, Revlon and Levis.
Visa also recently signed a deal with shopkick that rewards consumers if they use their Visa card to make a purchase. The points are called kicks and are interchangeable between retailers who are part of the alliance.
According to ExxonMobil, shopkick could drive new foot traffic to their sites. The refiner cites shopkick research showing that 44% of its users said they had been to a specific retailer more often since downloading the app, while 53% said they had bought something that they had not planned to buy.
shopkick installs small transmitters in the doorway of stores that sends out an inaudible signal that is picked up by any cellphone where the app has been installed and is open. The app tells the consumer how many kicks he will receive if he walks into the store. The number is agreed between shopkick and the merchant, but is usually around 60 to 100 points, sources said.
Consumers then receive pop-ups offering deals available at that store, such as discounts on Cocoa-Cola or Snickers bars. If the consumer scans product bar codes for information or picks up a product and buys an item at the store, he or she will earn more points--for example, 150 kicks for four items scanned. He or she can then spend the accumulated kicks on gift cards at stores like Target, movie tickets or gasoline cards.
In a presentation to marketers, ExxonMobil said shopkick data shows the app increases basket size by driving consumers to pick up more items. The average basket purchased by a non-shopkick consumer was worth $25, or $41 at top quartile stores, but the shopkick user basket size was worth $52.
One pilot program will launch in three markets with up to 425 ExxonMobil sites--New York City, Miami-Dade and the Washington, D.C., metropolitan area, sources said. Further market tests are planned.
Marketers who sign up for the program will receive a special transmitter that will be shipped and installed at their sites free-of-charge by Euless, Texas-based sign company Federal Heath. Installation takes about 30 to 60 minutes with no site employees involved. ExxonMobil will provide the equipment and onsite advertising and cover the cost of the kicks for marketers who agree to take part in a pilot test. It is not known how much ExxonMobil will charge retailers for the program if it decides to adopt it market-wide, but sources said the receivers usually cost about $100.
ExxonMobil said that it plans to promote the program through a new digital and online strategy and that it is working with shopkick on a plan to manage the walk-in and purchase points to be offered. It wants marketers to solicit and sign up their dealer locations within a month or so. They must also agree to share site-level results for monthly fuel and inside store sales.
In a presentation to ExxonMobil marketers, shopkick said it has already deployed transmitters in 4,000 stores and 250 malls in 50 states. It said 2.8 million users have listed more than 75,000 stores on their "Fave Screens" and have browsed or viewed digitally 800 million products. Some four million of those users were "real walk-ins" to stores who scanned 10 million products.
According to shopkick, its demographics show that 92% of its users are in their prime shopping years--18 to 60 years old. Of those people, 18-to-24-year olds account for 31%, 25-to-39-year olds represent 49%, and 40-to-59-year olds account for 12%.
Consumers now spend more time on mobile apps than they do surfing the web--respectively, 81 minutes a day versus 74 minutes a day, according to Morgan Stanley data cited by ExxonMobil. Some 82.2 million people own a smartphone--Android and Apple have two-thirds of the marketplace--and 79% of them use their devices to help with their shopping, said ExxonMobil, citing data from the Nielsen Co. and other sources. Google is said to be activating 700,000 Android devices daily.
shopkick, based in Palo Alto, Calif., opened for business in 2010. It is backed by $20 million from venture-capital firms, and Citigroup is footing the bill for new transmitters in major markets that include San Francisco, Los Angeles, Chicago, New Orleans and Detroit, as well as the Washington, D.C. market, according to news reports. The company focuses more on bringing people back to a store, rather than giving a discount to those who drive across town to get it but may never come back again, shopkick co-founder and CEO Cyriac Roeding has said.
ExxonMobil confirmed for CSP Daily News that it plans to test shopkick as part of its overall loyalty program, which also includes its recently introduced Return and Earn initiative.
"This pilot will allow ExxonMobil's U.S. branded wholesalers to test an evolving, unique and differentiated offer," said a spokesperson. "We are testing this loyalty offer to see how it changes consumer behavior" and continue to look for opportunities to support loyalty for our customers.