Visa Teams Up With Shopkick To Dole Out Retailer Reward Points At The Point Of Sale

Visa is making a major move in the commerce and technology space, teaming up with Shopkick, an innovative geo-coupon system that has received funding from Kleiner Perkins, Greylock, SV Angel and others. The two companies will begin offering consumers a way to receive rewards points for retailers at the point of sale when they use their Visa credit cards.

With the new partnership, called ‘Buy & Collect’, Shopkick users will get rewards (or ‘kicks’) for swiping their Visa debit or credit card at any one of six retailers, including ToysRus, Old Navy, Wet Seal, American Eagle, Simon Malls, and Arden B.

Of course, to understand the nature of the new transaction, you need to understand how Shopkicks works. Instead of checking in, as you would with a geo app like Foursquare, Shopkick automatically recognizes when someone with the free Android or iPhone app on their phone walks into a store. Once a Shopkick Signal is detected, the app delivers reward points called “kickbucks” to the user for walking into a retail store, trying on clothes, scanning a barcode and other actions.

Kickbucks can then be redeemed across all partner stores for gift card rewards or for Facebook Credits. User can also receive special discounts on specific products at partners stores like Macy’s, Best Buy or Target. National retail partners in the loyalty program include Target, Best Buy, Macy’s, Crate & Barrel, Old Navy, American Eagle, Sports Authority, Toys R Us, Simon Malls and others, and 20 brands (P&G, Unilever, Kraft, Colgate, Clorox, Disney, HP, Intel). One of the retailers is estimating $50 million in measurable incremental revenue as a result of the shopkick mobile app.

As Shopkick founder Cyriac Roeding explains to us, the first problem for a brick and mortar retailer is to get foot traffic, which Shopkick helps solve with its app. But the second and third problems are how to drive conversions while a consumer is in the store, and how to make sure the customer returns. “If we are part of the purchase transaction, we think we can see great results and early tests have proven so,” he says.

Existing Shopkick app users will be automatically alerted to the availability of the new Buy & Collect program and those who are new to the app will be notified of this optional program. In order to start collecting Kicks at the point of sale, Shopkick users have to sign-up and link their Visa credit card or debit card once on the app or site and then any purchases using that card at participating stores will earn you Kicks (if you have a debit card, you need to use it as a credit card to receive Kicks).

Shopkick app users who opt in to the Buy & Collect program will see a green payment card icon on their “nearby” screen to let them know there are additional offers at participating merchants. By tapping onto that merchant, they’ll see the buy and collect offer such as “Spend $20, get 400 kicks” at the top of the page, while they are in the store. Consumers will get extra Kicks if you spend more than the average basket size at the store.

Once you earn Kicks at a point of sale purchase, you’ll get a push notification on your phone automatically that will tell you how many Kicks you earned with your purchase.

As Visa’s senior business leader for information products Leigh Amaro says, “This program is built around Visa’s strategy to personalize the shopping experience for consumers and, increase conversion rates and drive larger basket sizes for merchants…we have a commitment to using new technologies to enhance the shopping experience to consumer and add value to merchant.”

Roeding says this is just the beginning, and intends to expand the partnership to other retailers. “Walk in rewards are important, but the combination of walk-in rewards and purchases is killer combo,” he says.

Since the Shopkick’s launch in August 2010, the app has seen a whopping 700 million product views, and the startup expects to pass 1 billion product views this year. There have been over 2 million physical walk-ins to stores (which are measured from the Shopkick signal device installed at the store). The device is installed at 3000 large stores and 250 malls now, and even landed a lucrative deal with the CW network.

Shopkick users open the apps on average on 14 days per month (often several times a day). Each day they open the app, they look at 16 stores on average. That means, per month they look at over 200 stores via the app on average. And users have scanned 7 million products over the past year, which is up from 3 million in February.

There’s no doubt that part of the future of commerce is in closing the redemption loop. As we wrote previously, the redemption loop starts when a consumer sees an ad or an offer for a merchant, and is completed when the consumer makes a purchase and that purchase can be tracked back to the offer. And technology companies are catching on to this. And credit card companies are an integral part of this experience.

For example, Foursquare and Facebook have also formed separate partnerships with credit card company American Express. Earlier this year, Visa launched a location-based deal deal with the Gap to serve offers.

The future of commerce will be combining purchase data with innovative technologies like Shopkick’s to help close the reception loop and encourage consumers to purchase again at retailers. And as the holiday shopping season takes off, there’s no better time for Shopkick, retailers and Visa to give consumers an incentive to swipe a little more (and more frequently).