Government // Mobile & Wireless
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Fritz Nelson
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Full Nelson: Shopkick And Novitaz Aim To Drive Rich Retail Experience

Retailers looking to lure customers into their stores and up to their cash registers have been waiting for the perfect system to pull in people with special offers. Shopkick and Novitaz are helping pave the way.

Shopkick takes a different approach. First, it installs devices in-store -- they look similar to WiFi access points. But instead of using GPS or any form of triangulation, the device sends inaudible audio signals, which interact with a phone's microphone. The offers get sent to the phone (there will be a free iPhone app sometime this summer).

Shopkick revealed a list of plans for its offering, including the ability to earn points (kickbucks), which can be redeemed for causes (the company also formed CauseWorld, which lets users earn karma points for checking into affiliated merchants, which donate money based on those points), Facebook currency, song downloads, and instant gift cards that can be redeemed in store.

Shopkick says that using audio signals allows the campaigns to be isolated within the building. Most other check-in-based systems rely on less precise GPS, allowing the consumer to be merely in the vicinity of the store rather than inside it. In Shopkick’s demonstration, we were given iPhones and we were able to check in to Best Buy from outside the store but received offers only when we walked inside.

Consumers will also be able to use their iPhones to scan barcodes in the store and earn kickbucks and potentially receive instant offers. Upon checkout, if the merchant has integrated the Shopkick experience with its point-of-sale system, users will sometimes receive instant discounts. The user simply has to provide his or her phone number and the participating merchant's system kicks in. These offers, from when the consumer walks in all the way through checkout, can be personalized, using data collected over time, company officials told me.

Shopkick’s first partners will be Best Buy (which is rolling out the service across the country on a schedule company officials wouldn’t reveal) and Macy's. Best Buy helped shape the final product, and the Best Buy team worked on coding the point-of-sale integration. Interestingly, Shopkick's business model is based purely on the success of the merchant. The system is free, but Shopkick takes a piece of each transaction it drives through offers. For retailers, the ROI story is almost a no-brainer. Shopkick says it will have a privacy polcy in place and doesn't monetize the data in any way.

Novitaz is angel funded. Ramchandani was VP of engineering and CTO at Shop911 and VP of engineering at Commerce Events. Two of the companies he has been part of have been acquired.

Shopkick is funded by the Kleiner Perkins iFund, Grelock Partners, and Reid Hoffman. It launched CauseWorld in 2009 in partnership with Citi, Kraft Foods, and Proctor & Gamble.

Fritz Nelson is the editorial director for InformationWeek and the Executive Producer of TechWebTV. Fritz writes about startups and established companies alike, but likes to exploit multiple forms of media into his writing.

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