Target has once again proven to be a breeding ground for payment innovation.
The retail giant, which gave an early boost to the Starbucks mobile payment app and the American Express low-fee prepaid card (see story), has given shopkick the go-ahead for a nationwide rollout of the vendor's mobile rewards system at its stores.
"It's a wonderful validation," says Doug Galen, shopkick's chief revenue officer, in an interview on May 23. "So many things that are tested don't make it to a national rollout."
Shopkick launched its system in mid-2010 and it has worked with Target since November of that year in a test at stores in seven cities. Under Target's guidance, shopkick was able to fine-tune aspects of its mobile rewards system.
Shopkick provides "kicks," its rewards currency, for certain consumer behavior, such as visiting a store or making a purchase. Its app detects store visits through an audio signal that a smartphone's microphone can pick up but that shoppers don't hear. Shopkick can also track and reward users' spending through a deal with Visa it announced in November (see story).
"It's Target's commitment to test, Target's commitment to try new things, that allowed us to help gather these learnings" such as how to tweak the number of kicks to offer for each activity, Galen says.
"One of the biggest lessons learned has been: when we modestly increase kicks, we can dramatically increase the number of people that walk into a store," he says. "Kicks actually do change consumer behavior."
Shopkick's system relies on a phone's network connection to verify that a user has entered a store and to reward the user with kicks. An April update to shopkick's app reduces its reliance on a clear network signal, allowing it to work in more stores (see story).