Dive Brief:

• Shopkick, the shopping rewards app, has launched Shopkick Grocery to encourage customers of Kroger, Publix, Safeway, Target and Walmart to patronize stores with opportunities to earn free gifts cards while grocery shopping, according to a press release. The company’s biggest launch to date, Shopkick Grocery is available in more than 37,000 stores nationwide. 
• In addition to earning free gift cards, grocery customers using Shopkick Grocery can create shopping lists, score rewards for trying recipes and discover new products. Shopkick works by leveraging mobile location technology to recognize users when they walk into a participating store. Just walking in earns users rewards, called kicks, as does scanning items and engaging with brand content. 
• Shopkick Grocery incorporates featured content from brands including Ben & Jerry’s, Coty, Dole, Mentos, Purina and Sargento. Customers checking out the brands’ products on the app can earn additional rewards. 

Dive Insight:

Shopkick was an early entry into location-based marketing, leveraging mobile technology to recognize shoppers when they enter so retailers and brands can engage with shoppers. The app has been tapped by Macy's, American Eagle Outiffers and others. However, with department stores and specialty retailers currently undergoing a significant downsizing in the number of stores they operate, the mobile platform is likely eyeing grocery retail as its next opportunity. 

While weekly grocery shopping trips and spending climbed last year, grocery companies are challenged by millennials fleeing their locations in favor of restaurants, bars, drugstores and e-commerce alternatives, emerging competitors online and offline, notably AmazonFresh, FreshDirect and Thrive Market, offering convenience and sometimes low prices. Grocers have been slowly migrating to the digital age to address the challenges and keep up with consumer shifts. 

But grocery stores still flourish in a physical environment — and it’s where they're striving to improve shopping frequency. Shopkick Grocery’s hook is that, unlike e-commerce grocery players, its intent is to push people into stores. Shopkick promotes the app as deepening the relationship between grocers and their clientele, driving awareness, sparking measurable streams of foot traffic, fueling product engagement and boosting in-store sales. Compared to paper circulars and coupons, Shopkick pronounces the app produces better performance while not eating away at margins on merchandise.

Grocery brands can also reach shoppers via the app. Ragu pasta sauce worked with Shopkick and Mindshare to identify a path-to-purchase strategy extending from customer homes to targeted messaging inside stores, according to the press release announcing Shopkick Grocery. The strategy led to increased consideration and elevated sales of Rage at key retailers to hit a conversation rate meeting the company’s benchmark.

In its early tests of Shopkick Grocery, Shopkick disclosed 65% of users reported they’d try a brand or product if they could earn rewards for purchases of the brand or product, and 62% said they’d shop at a different grocery store to receive more rewards. Now, its Amazon’s turn to respond with Prime perks.