Shopkick's CEO talks entrepreneurship, mobile marketing and the future

with Cyriac Roeding, co-founder and chief executive officer of shopkick
Cyriac Roeding is no newcomer to mobile marketing. His latest venture, shopkick, is the largest location-based shopping app on the market, and his third business. Roeding talked to FierceMobileContent about the intersection between online and offline shopping, the future of the mobile content industry, and what to expect next from shopkick.

FierceMobileContent: Currently, Shopkick is available for iOS and Android. Is opening the app up to be available on other platforms (Windows Phone 7 or BlackBerry) something we can expect in the near future?

Roeding: Right now we are not planning on doing that. iPhone and Android are the two main platforms that we are currently focused on because we are actually working on building the product out further over the next few months. You are going to see a lot of new additional features and capabilities on shopkick and that is what we are currently focused on.

FierceMobileContent: What differentiates shopkick from apps like Scvngr or checkpoints that also reward users for checking into different locations?

Roeding: They're actually very different. There's three different types of location-based apps. The first one is location-based social apps like Facebook Places, foursquare and Gowalla. The second type is location-based gaming apps like my town or Scvngr. And then the third kind are location-based shopping apps, like Cellfire and shopkick and checkpoints.
Checkpoints, however, is very different, because they are really about scanning products and getting rewards for that. Shopkick is doing scanning on the side and already has way more scans than checkpoint. However, that is not our business. [Our business is] to drive people to stores and give them rewards for walking in and also give them great offers and discounts at places. It's really about rewarding you with great rewards and offers at all your favorite stores. It's less about scanning objects. That's kind of a minor part of shopkick. We think that scanning is not really what is going to define shopping in the future.

FierceMobileContent: How do you expect the mobile content industry to evolve, given your longtime experience in the market? Will smartphone apps continue to drive the business, or will the market evolve past apps?

Roeding: Yeah that's a great question. In the future, a few years out, I think we are going to see the mobile web over applications. The reason why applications are so big today is that the speed and functionality of mobile websites is quite limited as compared to applications. Applications are way nicer to experience--they can have animations, they are faster, they look more beautiful, and the interface is better.

It's a little bit like on the PC, how it went from desktop software to the Internet. It's going to be similar on mobile, but it's going to take a few years because the processing power of cellphones needs to increase as well as the speed. When LTE comes into the game, the game will change significantly. It's a different experience.

FierceMobileContent: Shopkick is currently a free application for users. How does your company plan to make money? 

Roeding: We actually already produced revenue from day one of shopkick, which makes us very different from other location-based apps because we are basically the first 100 percent, performance-based app in the marketing world. You earn kicks as a rewards currency; we get a share of the value. That is basically the physical equivalent of what Google created online--the pay-per-click model. This is the physical click, where if you walk through a door of a store, you express purchase intent at a store but haven't bought anything yet. So essentially we have created the real-world version of a click. We call it cost per visit, CPV. So we also took the second most successful online business model. It's an online affinity model. It's like an offline affinity. Whenever you use an offer on shopkick, let's say 10 percent off at Best Buy, we get a share of the entire package. Which is like an online affinity in an offline world? So we have a cost per click turning into a cost per action and cost per action turning into cost per purchase.

For the retailer it's awesome, it's the first, the very first 100 percent, performance-based model in a physical retailer world. That has never existed. They only pay for what they get. If somebody walks through the door, they pay for the visit. 

FierceMobileContent: Shopkick users gain "kickbucks" from visiting different approved retailers. What benefits can you gain from earning kickbucks, and can users realistically expect to redeem them for prizes given how many kickbucks are needed to earn most prizes? 

Roeding: It actually goes really quick. The accumulation goes very fast. For example, for 875 kickbucks you can get a $25 gift certificate for a restaurant of your choice. Think about this, you can already get 75 kickbucks for walking into a store and you can scan a few items and before you know it, in a day or two you have a $25 gift certificate. How cool is that? And the way you redeem it is with a touch of one button on your cellphone. You just go to what we call the rewards wall, there's a button on the cell phone, you click on it and then you see different rewards you can get: Best Buy gift certificates or donate to charity or you can get an iTunes giftcard or Target giftcard. It's the easiest form of redemption that I have seen for a rewards program.

FierceMobileContent: What kinds of new developments or new partnerships can we expect from shopkick in 2011?  

Roeding: We are building our retail partnership base out, and we are getting more and more requests from retailers to join, which is awesome to see. And we are building out our partnership base on all levels, from retailers to strategic partners like for example we have Simon Malls as a partner. Simon Malls is the largest mall operator in America. So we are building our partnerships at a rapid speed and at the same time we are going to see our shopkick product evolve for our consumers. It will become more and more valuable over the next few months.

FierceMobileContent: Do you have any predictions about the mobile industry for this year and the next couple years, given your position in the industry? 

Roeding: I think we are going to move past the check-ins. We are going to move to an automatic contextual recognition of consumers where the right information and the right offers are present, but not intrusive to you. Privacy will remain an important topic if it is handled well; consumers will want to share a lot but only then. I think that we will see how the cellphone becomes more and more of an ID card, where it recognizes you in the right moment and it provides you with offers and rewards as you go in and out of places, but not in a spammy way.

Then the integration with payment will actually occur in the next few years, with Near Field Communications coming. And that will create a whole new opportunity to experience physical stores in a whole new way, because you can get product info and you can experience the world together in new social ways based on your context.