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Expecting Something in Return for Your Check-in Efforts?

New Crop of Location-Based Loyalty Apps Reward Consumers With Deals, Discounts

Published on .

NEW YORK (AdAge.com) -- The card-based loyalty program might just be going the way of the dinosaur ... or the two-way pager.

The newest crop of location-based mobile apps rewards consumers for actions before they reach the register, and it could save them from fumbling for cards in wallets or loading down their key rings with plastic tabs. Mobile apps like Shopkick, Loopt Star and CheckPoints offer shoppers discounts and deals when they check in, walk into a store or pick up products and scan their barcodes. One startup focusing on loyalty programs for hotels, Topguest, even rewards users for tweeting.

"We realized a while ago that the conversations about our hotels are happening on Facebook or Twitter without us," said Michael Doneff, VP-marketing for Viceroy Hotel Group, which offers discounts to users who check in at its hotels through Topguest. "These are guests who are passionate about our properties; why wouldn't we want to reward that?"

This set of loyalty apps also takes the check-in-to-places phenomenon that Foursquare has popularized right to the mall or grocery aisle. Rather than checking in to alert your social network or post to Facebook, users can check in for discounts to use at the register or for points that add up to gift cards, prizes or donations.

And there are some big-name proponents. Mikael Thygesen, chief marketing officer at Simon Property Group, just spent the past few weeks traveling to big-name retailers with Shopkick's founder and CEO Cyriac Roeding. "They have all been intrigued and interested," Mr. Thygesen said of the meetings. "The fact that, for the first time, you as a retailer are going to be able to identify a shopper when they cross the threshold of the store, not when they're at the point-of-sale and getting ready to exit the store, that's a game changer."


The app rewards shopper behavior, beginning when they walk through the door. Consumers rack up points for scanning products, testing products or even visiting a dressing room. Rewards are doled out as special offers and discounts from the retailer, or as Shopkick's currency, Kickbucks (see sidebar), which can be donated to charity or redeemed for Facebook credits, products or gift cards.

Best Buy, Macy's, American Eagle, Sports Authority. Simon Property Group will be rolling out Shopkick technology in more than 100 malls before the holiday season.

Instead of relying on GPS technology for check-ins like other apps, Shopkick uses a device in store that emits an inaudible sound picked up by the user's phone. That ensures consumers are only rewarded when they actually enter the store.


Swagg is meant to be a mobile wallet—consumers can buy, send and redeem gift cards through the app, without the piece of plastic. Like credit-card companies, Swagg will reap fees on transactions. With an iPhone app slated for the holidays, Swagg also aims to consolidate numerous membership and loyalty cards for multiple stores in one app that keeps track of purchases and alerts when rewards are due. The app is also a vehicle for location-based offers and deals. Users can set their preferences to tailor the deals they receive -- say, decline men's clothing, prefer electronics -- while Swagg collects on a cost-per-action basis.

American Apparel, with more expected in the coming weeks.

In a category crowded with venture-funded start-ups, Swagg enjoys the backing of Qualcomm. The tech giant bought Swagg developer Firethorn for its mobile-commerce expertise and already enjoys relationships with major handset manufacturers.


Check in at participating stores on Loopt Star and get a discount to take to the register. The app recently launch "Rewards Nearby" so users can find deals up to 20 miles away when they launch the app. The new feature puts the four nearest special offers to you at the top of the check-in screen and, since it launched, stores have seen foot traffic from the app spike, says Loopt founder Sam Altman.

Gap, Burger King, Steve Madden, Element, Paul Frank

Loopt grew up as a social location-based network like Foursquare and recently moved into retail with the launch of its Star extension. The app is also based on Facebook, which could prove fruitful now that the social network is turning on its new location feature, Places. "The reason we're moving everything to Facebook is we're close to a world when you can display your location to all your friends," Mr. Altman said. "There's about to be 100 times more geo-social data there."


Launched in June, this service aims to convert your existing check-ins and tweets about hotels and airlines into loyalty points for programs you've already signed up for. When you check in on Foursquare or tweet about a travel brand, Topguest automatically translates those social-media actions into points for a loyalty program. Brands decide the value of actions, like check-ins and social-media mentions, to rewards points beyond dollars spent.

Users can earn loyalty points at 4,500 hotels globally. It's partnered with the rewards program Priority Club, which includes Holiday Inn, Intercontinental, Crown Plaza and Hotel Indigo. Standard Hotels and Viceroy have also signed on.

Topguest is not an app and doesn't ask you to check in or post on yet another service. "Rather than trying to get consumers to adopt new behavior, we want to give rewards for things they're already doing like checking in on Foursquare," said Geoff Lewis, Topguest CEO and cofounder.


When the app launches this fall, users will earn prizes like iTunes songs or iPads, gift cards or airline miles for picking up and scanning product barcodes once they've checked in to a specific store. When the app is opened, it features a list of products that are worth points. Featured products from brand partners allow for bonus points or special promotions like coupons or buy one, get one offers.

CheckPoints will announce a number of brand partners at launch in mid-September, said CEO-cofounder Mark DiPaola.

This app focuses on supermarkets, office-supply stores and home-goods outlets, which house multiple brands on its shelves. Mr. DiPaola calls it more product-focused than other apps. "When a user goes into these busy places with tens of thousands of products, we're aiming to drive consumers to pick up specific products, whereas they may have walked past that product before, or not even walked down that aisle," he said.

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