Gimmicks Aren't Enough to Drive Adoption of Location-Based Shopping

Foursquares and Gowallas of the World Will Give Way to Apps With More Sophisticated Functionality and Services

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Jeff   Hilimire
Jeff Hilimire
Food marketers intent on shepherding and tracking shoppers -- from car, to cart, to checkout, to chowing down -- are understandably salivating over the potential of location-based mobile apps.

Badges and virtual goods may seem cool in the first few encounters, but how long can the thrill of a mayorship or a virtual Tazo Tea bottle last? It's gimmicky. Moreover, what if I want to make a purchase but don't want to check in? Lasting and sustainable innovation in this space will require apps that offer far greater benefits for both consumers and marketers. Don't get me wrong. Consumer food marketers and, indeed, all marketers, should be actively experimenting with new apps and technologies to determine their potential value and how best to use them.

But Foursquare and other simple location-based apps can't turn this niche trend of early adopters into mainstream consumer behavior. Foursquare may be growing fast and has more than 4 million users, up from 170,000 at the end of last year, according to a recent news report. Compare that to Facebook, which has more than 500 million active users.

What's more, a Forrester Research study said that only 4% of U.S. online adults have used location-based social networks on their mobile phones, and only 1% use them more than once a week. Most users are male, with 70% between the ages of 19 and 35.

Simply put, there's minimal shelf life for promotions on the shelf. And my best guess is the Foursquares and Gowallas of the world will soon cede market share to apps with more sophisticated functionality and services.

For example, Checkpoints and WeReward are apps that reward consumers for purchasing with points redeemable for money or stuff. This is far more beneficial. Checkpoints lets consumer redeem the points for gift cards (Victoria's Secret and iTunes, among others), merchandise (a Hermes Birkin bag, for instance) or transfer them to particular organizations, such as The Humane Society of the United States. With WeReward, consumers accrue points; each 1,000 points are exchanged for $10, awarded via PayPal. One recent WeReward promotion, for instance, asked consumers who checked in at Chick-fil-As across the country to take pictures of themselves eating a spicy chicken sandwich and send messages to the company telling why they like the sandwich. Participants received 50 WeReward points, which cashed out to 50 cents. Apps like these have great potential for product launches or promotions to catalyze consumer behavior.

And that's just the beginning for food brands. Grocery retailers (already sitting on mounds of data from loyalty-card programs) are building apps capable of serving up individualized content based on known preferences and prior purchases and could drive attention to items of interest in a nearby aisle, for example, or help generate a digital shopping list.

The mobile phone is always in the pocket or purse of the consumer so apps have the potential to provide marketers with a greater swath of customer data than ever before. Say I am a huge fan of Dasani bottled water. I usually buy a bottle at CVS each morning, a case at Key Food each week and three every day at the lobby newsstand in the building where I work. Right now, while Dasani marketers know in aggregate bottle sales at each of those places, they do not have purchase data for individual consumers. Apps of the future will change that.

With this granular data, marketers will be able to isolate the biggest spenders, the most loyal customers and act accordingly to develop more sophisticated loyalty programs than today's send-in-your-box-tops genre. And that most certainly will do more for me than calling me Mayor and handing me a coupon.

Jeff Hilimire is chief digital officer at Engauge. He blogs at You can send him an email at
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