Will first generation customer experiences kill location based marketing?

prototypeA comment on twitter caught my attention last week…

Gap won’t honor their Foursquare discount unless you get credit card. No asterisk or anything on special. Won’t see me there for a while.

I’ve seen other complaints about location based marketing promotions being hard to redeem but what  caught my attention here was that this tweet didn’t come from anyone with a professional interest in location based marketing, it came from a woman that was just trying to get a good deal on a pair of jeans.  I.E.  A real end-user.

Much has already been written about early location based marketing campaigns falling short of an ideal customer experience.  The Ad Age piece “What Marketers Can Learn From Starbucks’ Foursquare Stumble” chronicles the poor customer experience some users faced when trying to redeem one of the largest scale location based marketing promotions tried to date.

So I spent the weekend testing out the offering of another location based marketing pioneer, ShopKick.  What I found was a number of gaps in the customer experience:

  • Auto Check-In – The marketing buzz around ShopKick is largely due to the promise of “Auto Check-In” but in this case, “auto” means that while you’re in the parking lot, you need to remember to fire up the ShopKick app and then hustle through the door of your local Best Buy before the AutoLock on your phone engages or you get a phone call.  Even then, you have a 1 in 4 chance of auto checking in as the “pilot” is only in a quarter of Best Buy’s stores.  At this point “Auto Check-in” is a pretty cool proof of concept, but an end-user who expects ShopKick to free them from the Check-In fatigue they are experiencing with FourSquare, will be disappointed.
  • Places Database – Unlike FourSquare I can’t create my own venues in ShopKick so I’m dependent on their database of stores being accurate, and it wasn’t.  I was able to check-in to an REI store that had moved to another part of town five years ago.  Accurate “places” based data for these services is going to be a real challenge, especially for those that don’t have a crowd-sourcing feature.
  • Product Info – ShopKick lets you scan bar codes in the retail store to earn points and get detailed product info.  But today the info you get is less than what you can already find on the shelf, and in a Best Buy you can’t scan their proprietary 2D SKU code, or the new QR codes that are rolling out.  You can’t get access to product reviews from BestBuy.com, advice from Twelpforce, etc… Again a very cool concept but not yet a compelling execution.
  • Promotions – ShopKick offers Coupons on specific products while you are roaming the store trying to collect Kickbucks.  But all the so called “Deals” are the exact same price that is available to every other shopper in the store!  It felt like Best Buy and ShopKick were trying to trick shoppers into thinking these were special prices.  This perceived misdirection is a customer experience FAIL.

I can understand why all these customer experience challenges with FourSquare, ShopKick, and others occur.  Doing ANYTHING with large retail chains is very hard.  Navigating the matrix of approvers, stakeholders, budgets, ect… can be all but impossible.  So before you go to the monumental investment of time and resources necessary to create a well integrated customer experience, it’s temping to cut some corners and get something out there quickly to prove the demand.  There is nothing wrong with this “Pilot” approach.

But, the corners you cut need to be the ones that are transparent to the end user.  Maybe you don’t have the automated back end to customer affinity so you get a weekly data dumps of slightly stale data to use in your app.  Or you can’t get the IT department to let you link to the store level product database, so you link to the publically available Best Buy Remix database instead to display product info and customer reviews.  The point is that it’s OK if the Pilot isn’t perfect, but the customer experience has to be “good enough” to excite the early adopters.

If the early adaptors don’t have a good experience the first time they try FourSquare, they aren’t likely to give it another chance.  Worse, since these location based marketing services cater to social networking early adopters, the cycle of negative PR that results will be greatly amplified.

You see this challenge every time a new technology tries to find a home in retail stores.  When technology companies first started trying to sell touch screen “kiosks” to retailers they were extremely expensive and unreliable (IBM and NCR should have bundled an “Out of Order” sign and wire transfer instructions with every unit they sold ).  It got so bad, that subsequent vendors couldn’t even call their products “kiosks” because the name had such a negative connotation with retailers.  Bloated, expensive, and proprietary “Digital Signage” solutions have that same problem today.

Ironically, FourSquare’s co-founder, Dennis Crowley, seems to understand the problem perfectly when he call’s Facebook’s new Places offering “boring and unexciting”.

I don’t want to see location based marketing deployments for retail hampered by early mistakes.  It’s vital that the early adopter users have a great experience.  And I’m not trying to pick on FourSquare or ShopKick.  I’m thrilled that companies like them are taking chances and moving the industry forward.  I don’t want to see either company end up as a “pioneer with arrows in their backs”, I want to see them both succeed and be well rewarded for being a first mover.  But I do think they need to rethink some of the customer experience corners they are cutting. 

Have the first generation experiences already hurt the publics perception?  Should ShopKick have iterated a bit more before firing up their PR efforts?  What has your experience been?


  1. Does anyone remember “Branded Islands” in SECOND LIFE?

    Have QR Tags already jumped the shark (because they don’t deliver anything intriguing and they are painful to use)?

    Has LBS died before coming to life?

    Are all these “new/clever/shiny” things really necessary? Or we just love them because they are new/clever/shiny?

    The bigger question is: Is mobile marketing as a whole screwing up?

    Honestly, about the only retail-2-mobile experience I continue to use is Google. I Search, I get quick info; I save my deep Search/Research for the laptop at home. Are there engagements I’d want and enjoy? Youbetcha. But, no one is delivering them.

  2. That is indeed the magic question, Bob. Gartner Group talks about this “Hype Cycle” Gartner Hype Cycle
    It shows the various phases a new technology goes through. And I find it a pretty useful way to think about this stuff.

    Different consumers are at different places on the curve at any given moment, you (and other early adopters) are probably in the “Trough of Disillusionment” while I suspect the bulk of shoppers aren’t even on the “peak of inflated expectations” yet. The magic question is how deep will the trough be when the bulk of consumers get to it? Will it be difficult to pull out of it, or will they seamlessly move on to the “slope of enlightenment”?

    If 500M facebook users all tried to use smartphones in a retail store today, I’d say the trough would be terribly deep, but hopefully all these players have a bit of time to make the experience better before then.

    The reason I think the need is real and that all of this isn’t just a “new shiny technology” is because we’ve all fundamentally decided we need to be more educated about products before we make a purchase decision, and the amount of info we need/expect is getting harder and harder for retailers to deliver with traditional merchandising tools. At the same time, all trends point to mobile devices replacing our Desktop/Laptops as our primary info device in next few years. So I think it’s inevitable that we’ll use the SmartPhone of the future to do some of our research in store. Once you make that leap you are clearly going to want the phone to know what products are in front of you, available for immediate purchase, recommended by your most knowledgeable friends, etc…

    My $0.02 anyway 🙂

  3. I’m well into my curmudgeonly years and a bit on the impatient side (stop laughing Jason) but how about a simple plea for things like decent quality, selection and service – y’know, by people who are truly empowered to do well by the customer? Too difficult? Haha, ok.

    A thing that’s important is the trust factor. What would make that? The app has to feel like it’s neutral and unbiased, that is, it should be as usable by a mom-and-pop as it is by a big-box chain. That would be achieved by having a low technical and financial barrier to entry, much like Google AdWords for example.

    Adding to the trust factor is some sort of user feedback – an element of hive-mind if you will – to qualify the value of the offers and reward the good ones. This will tend to weed out the stupid no-value plays like the Best Buy / ShopKick example referenced above. Kind of like Yelp, but more fluid.

    anyway my $0.02

  4. Neal, you are right of course. If I had to choose between cool mobile marketing programs or just great execution of customer centricity, I’ll choose being customer centric every time! But I’m betting that the great retailers of the future will be good at both.

    My biggest learning from Apple Retail’s success is that having great labor in the store trumps everything else. The problem is that when you grow to Best Buy’s size (much less Walmarts) it’s pretty hard to hire 150,000 great retail employees. Even Apple is now struggling to maintain their retail staff quality as they grow. So were going to need to some great tools to augment the experience.

    The trust factor of these tools will be key. That’s one reason I think we need social network aware peer reviews. I wouldn’t trust a random strangers good review of a new TV (or my techno-phobic mothers for that matter) but I’d certainly trust trust your review! So if I wasn’t planning on buying a TV when I went to the store (and so didn’t pre-research it), how am I going to figure out if it has your seal of approval when I’m standing in the store?

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