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April 16, 2013

Geofencing coupon apps

by willnich

I stumbled upon this article and thought that it was a nice follow up to our whitepaper analysis on RadioShack and our class discussion of how physical retailers can compete with the biggest Internet retailers.  Geofencing apps are not new but they have yet to reach widespread popularity.  I think we talked about similar apps to these in class.

Shopkick is an interesting app because you don’t actually have to buy anything to earn the rewards; all you have to do is walk into the stores to get points that count towards rewards.  If the deals are good enough, I can definitely see how this app can get me off my computer and into the store.     Because going to any participating store generates points, the shopper is incentivized to do more shopping away from his computer.   This is a good idea for an app, but is the incentive really motivating enough?  Is this just another one of those apps that you’d download once because it’s a cool idea, and then never think to use?

Kapture works a little differently.  In order to gain rewards, the user has to take a picture in the store and then troll his favorite social networks by uploading pictures for points.  I’m conjecturing here, but I don’t think many people would be willing to take on the reputation of that annoying over-sharer just to get points towards a buy-one-get-one-free ice-cream scoop.

Eventually, geofencing apps will be optimized to create real value for consumers but at this point, I think there is still work to be done.  Current trends indicate that the future of couponing is mobile, so I wouldn’t be surprised if many more apps like these show up in the near future.  Eventually, someone is going to get it right.

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