Shopkick Benefits From Having P&G Player as Major Adviser

And P&G's Tie With Shopping App Underscores Importance of Mobile to CPG Giant

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Silicon Valley is crawling with brands these days, and Procter & Gamble is no exception. It's partnered with the likes of Klout and Shazam, but its most enduring relationship has been with Palo Alto's location-based shopping app Shopkick, where it's had an executive "embedded" for the past three years.

Sonny Jandial is P&G's Silicon Valley ambassador. (His official, more long-winded title is associate marketing director of new-business creation and corporate platforms.) He doesn't work out of a P&G office, but rather rotates among P&G's startup partners, sitting alongside the entrepreneurs with whom he operates. While he's typically working with between five and 10 startups at any given time, his desk at Shopkick is where he spends most of his time. If he were a salaried employee of the startup, he'd be Shopkick's seventh of 55.

Shopkick lets users collect virtual currency called "kicks" that can be redeemed for offers or rewards like a Starbucks gift card or movie tickets by walking into a location of a retail partner and performing actions such as scanning a bar code or sniffing perfume at a Macy's fragrance counter.

Mr. Jandial's continued presence at Shopkick underscores the importance to P&G of being ahead of the curve on mobile. While Shopkick's user base is still relatively small (6.5 million users in June, as reported by Nielsen), it's the fourth-most widely used shopping app after eBay, Amazon and Groupon in terms of unique audience.

"We know we understand brands, retailers and shoppers, but we didn't necessarily understand mobile," said Mr. Jandial, who explained that venture-capital firm Kleiner Perkins Caufield Byers, a Shopkick investor, made the introduction back in 2009 when he was seeking out companies to work with. P&G does not have any equity interest in Shopkick.

While having P&G aboard in advance of its 2010 launch gave Shopkick early credibility among retailers and brands, its access to Mr. Jandial for product feedback has also been an advantage for the startup, which has raised $20 million and now partners with 13 retailers, including Target and Macy's , and upward of 50 brands. Prior to launching, for example, CEO Cyriac Roeding and his team had been unsure about whether to build rewards for product scans into the app, since the core value proposition had been the notion of getting rewards points simply for walking into a store. But Mr. Jandial was strongly in favor of product scans, since they would drive users to actively seek out products, and were a part of the initial release.

"This partnership has fundamentally changed how our product developed," Mr. Roeding said. "It was interesting to think about brands, but much better to turn around and say, 'Hey Sonny, what does P&G think about this?'" Shopkick's relationship with P&G and other CPG companies, such as Kraft and Unilever, has advanced beyond the theoretical, and P&G agency Starcom is handling the mobile buying, Mr. Jandial said. Shopkick makes money by charging for "kicks" delivered to consumers, which have a value when redeemed in the physical world of 40 cents for every 100 kicks, plus a little extra. It also takes a piece of the entire purchase or "basket" from a shopping trip if a user redeems a Shopkick offer.

Mr. Jandial isn't on P&G's operations side, however. His role is more akin to that of a VC, scouting talent in Silicon Valley and helping cultivate it. However, P&G hasn't invested in the Silicon Valley companies it's working with, with the exception of the genetic testing startup Navigenics in 2010.

"We inherently think of ourselves as an incubator," he said.

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