Shopkick Takes Shopping App Local

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After launching with national retail chains last year, including Best Buy, Macy's and American Eagle Outfitters, shopkick is bringing its mobile shopping app to small and medium-sized stores around the country. Through a sponsorship by Citi, the start-up will install its hardware for free at the first 1,000 local businesses selected, enabling shoppers to get rewards and deals.

The shopkick technology detects when someone using its app walks into a participating store, awarding them "kicks" or points toward purchases, as well as providing incentives for browsing certain products while shopping.

The company's app can now be used at more than 2,500 retail and 160 mall locations nationwide at various retail chains, including Target, Sports Authority and Crate and Barrel.

Shopkick's new small business initiative will roll out in 10 markets: Austin and Dallas/Fort Worth, Chicago, Detroit, Los Angeles, the San Francisco Bay area, New Orleans, New York, Seattle and Washington, D.C. Local business owners will be invited to apply to have the shopkick signal box installed in their stores, via www.shopkick.com/local. A hundred small businesses in three cities have already been involved in a pilot program for the past couple of months.

"We will do for small and medium-sized local stores what we have done for large, national chains: drive foot traffic. It's the single, hardest problem to solve -- and the most valuable driver of success -- for both retail and service businesses," stated Cyriac Roeding, co-founder and CEO of shopkick.

Reward points earned via the shopkick app can be redeemed at any other participating retailer. "Kicks" accumulated from visiting an independent local business could be redeemed at a Best Buy or Target. The shopkick currency can be exchanged for items including in-store gift cards, song downloads, movie tickets, hotel vouchers, Facebook Credits to play games online and donations to different causes and charities.

For Citi, the cost of the sponsorship comes to roughly $100,000, or about $100 for each shopkick transmitter installed, plus covering the expense of the small commission paid to shopkick for each "kick" awarded by a local store for a year.

Citi Ventures, the venture-capital arm of Citi, was an early investor in shopkick. The Palo Alto, Calif.-based company, which says its service has attracted 1.8 million users since launching last August, has raised $20 million to date from backers. They include Kleiner Perkins Caufield & Byers and LinkedIn founder Reid Hoffman.

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