Shopping app shopkick, now 4 million users strong, made some big waves when it first opened for business in 2010. With its combination of in-store hardware and user-friendly mobile app that pinged customers with deals when they walked into a participating merchant, it looked like one crucial part of the mobile commerce puzzle — actually getting people to use their phones to get deals on goods and buy them — was finally cracked. Today, at a time when many startups still shy away from talk of business models, shopkick has done something else: it’s reached profitability.
As of Q4, the company is in the black, it announced today. While shopkick still declines to talk about total sales or just how profitable it is, it also revealed that in 2012 its deals led to over $200 million in revenue for its merchant and brand partners, which include some 7,500 stores and the retailers American Eagle Outfitters, Best Buy, Crate and Barrel, ExxonMobil, Macy’s, MasterCard, Old Navy, The Sports Authority, Target, Toys“R”Us, as well as brands like Visa, Procter & Gamble, Kraft Foods, and Unilever.
Shopkick says that the $200 million figure is more than double what it made in 2011 — in total it’s driven $300 million in revenue since first launching in the autumn of 2010. It says that has tracked 16 million verified walk-ins to stores — 2 million/month in Q4 — along with 26 million product scans and “millions” of transactions.
Shopkick has introduced a level of “gamification” to the shopping experience, letting consumers earn rewards visiting stores — a big plus for retailers keen to increase foot traffic. It also offers a service whereby users can scan barcodes for selected brands to get additional deals or other benefits.
But it is the redesign of its Android and iOS apps that Shopkick introduced in October 2012, which included the addition of digital catalogs and saved product lists, that led to skyrocketing engagement, with its users making some 1 billion product views in the span of 12 weeks — before this, it took shopkick to reach 1.5 years to reach 1 billion product views. Some of that has inevitably converted into people actually purchasing those items viewed.
Many have noted how this year was when mobile shopping reached record levels this holiday season, and shopkick definitely benefited from that rising tide. “Holidays are always the sweet spot for retail, but this far exceeded even our hopes,” said Cyriac Roeding, CEO and co-founder of shopkick, in a statement announcing the profitability news. “With this milestone, shopkick is ready for 2013, when mobile payments and mobile loyalty will start to converge, which puts shopkick in a position to get even bigger this year.”
With his mention of mobile payments, it will be interesting to see how much further shopkick moves into that space itself. So far it has played up to the point of sale, but with more and more consumers prepared to use their phones and the phones of merchants to complete transactions, it wouldn’t be surprising to see shopkick move further in this direction, too.
To date, shopkick has raised $20 million from investors such as Kleiner Perkins Caufield & Byers, Reid Hoffman, Greylock Partners, SV Angel and Citi Growth Ventures.