Shopkick Seeks Global Scale as Part of SK Planet
Shopkick is being acquired by SK Planet (SKP), and aims to replicate success of its Seoul-based buyer, which serves three-quarters of South Korea's population of 50 million.
"We are planning to be very aggressive in the U.S. and outside the U.S.," said Cyriac Roeding, CEO and co-founder of shopkick. "[SKP's] penetration in South Korea only leaves out the people who are too young or too old to shop."
SKP, a part of SK Holdings and SK TelecomSouth Korea's largest mobile carrierhas agreed to acquire Redwood City, Calif.-based shopkick for about $200 million, a deal that should close shortly, said Roeding, who will remain shopkick's CEO. Shopkick's deployments will retain the shopkick brand, Roeding said.
SKP's rewards program, OKcashbag, started as a plastic card program, and has expanded into mobile. Its partners include T-Store, a mobile app store; and 11st, a mobile-commerce marketplace. SKP will use shopkick as the key platform for its U.S. m-commerce business, while shopkick hopes to leverage SKP's technology experience and IT heft to fuel an expansion.
Shopkick plans to announce new partnerships shortly. The company has more than 6 million users, and a roster of merchants that includes Macy's, Old Navy, Best Buy, JCPenney, Crate&Barrel, Sports Authority and Target.
Shopkick's system, called ShopBeacon, welcomes consumers when they enter a store and shows location-based deals, discounts, recommendations and rewards. It uses beacons scattered throughout a store to provide offers specific to each department. Shopkick also supports in-app transactions.
Shopkick and SKP will jointly develop new technology to enable larger deployments. SKP's existing technology uses beacons, Near Field Communication and other methods to allow merchants to locate consumers when they enter a store. Shopkick's technology mix includes beacons and ultrasonic technology that uses a store's music system to deliver offers.
Shopkick can help drive shoppers into stores and increase sales conversion rates, so it's an attractive proposition to merchants, said Zil Bareisis, a senior analyst at Celent. "Online-influenced offline shopping, or 'online-to-offline' is already a big trend in Asia. SKP and shopkick have helped pioneer this trend in their respective countries, and the deal can help both companies reach new markets."
Shopkick had received acquisition offers before, but SKP's size and similar model made an acquisition attractive at a time when shopkick is planning larger deployments, Roeding said. Shopkick was at a point where it needed an infusion of resources, he added.
"This deal will allow us to have more resources, more cash and we can do more in international markets," Roeding said.
While shopkick's model is positioned as a counter to showrooming, its real value is its ability to leverage customer data to create a personalized location-centric shopping experience, said Thad Peterson, a senior analyst at Aite Group.
Shopkick's technology can also be a lure for mobile payment initiatives, Peterson said. Through partnerships with the card networks, shopkick offers targeted rewards using customer data gathered at the point of sale.
"Linkage to payment is secondary, although the value that it could deliver to something like Softcard [Isis] or CurrentC [MCX] could be significant," Peterson said.