Shopkick acquired amid growing importance of beacon-enabled shopping
In a significant sign of support for location-based mobile shopping, SK planet – a division of South Korea’s largest mobile carrier – has agreed to acquire loyalty application shopkick for approximately $200 million.
For Shopkick, which is partnered with many major retailers and brands, including Macy’s, Old Navy and Target, the deal brings additional financial resources and business assets to help accelerate the platform’s growth. The deal is an example of the growing value of location-based shoppers services, including those built around beacon technology, as well as mobile’s significant potential to influence offline sales.
“If you look at who has acquired shopkick, it is the largest mobile carrier in South Korea and its subsidiary is called SK Planet,” said Cyriac Roeding, CEO and co-founder of shopkick. “As their name implies, they want to cover the planet with mobile shopping.
“In the U.S., they have selected shopkick as their launch platform to make this thing bigger and then, beyond the U.S., they want to use shopkick as a launch platform for global growth as well.”
Shopkick and SK planet are both focused on using online services, often accessed from a mobile device, to influence in-store shopping.
Forrester Research estimates the market for offline shopping that is influenced by online activity to be $1.4 trillion in the U.S., or more than four times larger than all online shopping revenue.
Shopkick is a leading player in mobile commerce and location-based shopping and is ranked by Nielsen as the most widely and often used real-world shopping app, placing it ahead of retailers’ own apps. Consumers use the app to earn points, or kicks, when they shop in participating retail locations and to redeem those points for rewards.
Shopkick also offers ShopBeacon,an in-store marketing platform built on Apple iBeacon technology that is deployed in 3,000 large U.S. stores, including all Macy’s locations.
For SK planet, which runs the largest cross-retail rewards program in South Korea, the deal expands the company’s presence into the United States.
SK planet operates OK Cashbag, a cross-retailer rewards program with 38 million subscribers in a country with a population of approximately 50 million and which processes $50 billion in transactions per year.
SK planet plans to leverage shopkick to help it build leading shopping products around the world, taking the partnership beyond mobile to connect online and offline shopping experiences in new ways.
Shopkick will continue under the leadership of its current management team, with Mr. Roeding remaining as CEO and on the board.
Mr. Roeding said he hopes the deal will help accelerate shopkick’s growth through geographic expansion, the integration of new features and capabilities as well as possibly the launch of additional apps and other acquisitions.
“These guys really have some insights that you can only have when you run such a huge program and run so many successful apps,” Mr. Roeding said.
Shopping app consolidation
Right now, a multitude of retailer branded apps as well as third-party shopping apps exist.
However, as the space matures, it is likely that some of these players will not have a large enough user base to continue.
“There will be a lot of retailers that will not see enough traction wit their own apps,” Mr. Roeding said.
“On the aggregator side, there is going to be a massive consolidation,” he said. “There is only going to be a very few that are going to be used by consumers
“You are not going to download 40 different apps for 40 different stores and use a diff app every time you walk into a store. You also are not going to use 5 different aggregator apps.”
Chantal Tode is senior editor on Mobile Commerce Daily, New York