How Far Should Check-In Mobile Apps Go?

At Sports Authority stores, consumers looking to win points by checking in at the store, Foursquare style, can go one better and earn more points by performing specific actions, such as trying out a particular golf club. It's one of the farthest reaching mobile trials thus far, but can it go much further?

What if the actions were associated with the customer and the product so that the retailer could offer a lot more points if the customer purchased the incentivized product within XX days? The POS could note the customer ID and know to watch for specific products. When a match happened, the points would be automatically issued.

Speaking of points, Sports Authority's initial effort—similar to so many retailers who have done the initial check-in experiments, including Best Buy, Macy's and American Eagle Outfitters (all of which are using ShopKick)—is being far too cheap with its points, which translate into gift certificates. As The New York Times observed at Sports Authority, "It takes a lot of points to earn even a $5 gift card."

The points are key. Make the consumer work too hard for a meaningful gift certificate, and you skew the results. If the points program doesn't do well, is the conclusion that Sports Authority customers don't like the system or is it because the incentives were too cheaply assigned? Give consumers a powerful incentive—such as "spend 15 minutes playing with things and get an instant $50 gift certificate to bring home some of the things you were playing with"—and you'll truly find out about how mobile can impact their behavior.

Sports Authority is taking the opposite approach, starting off incredibly low and reserving the option to increase the numbers later. But isn't that self-defeating? If people try it and discover that a lot of effort brought them one-tenth of the way to a $5 certificate, they'll be unhappy. If you increase the points a month later, it's too late. They won't likely try again and they've already badmouthed it to friends and family.

If you flip the approach, though, it works much better. Start high and reserve the right to trim the reward later. Then consumers are happy and you can reduce the benefit as soon as you have gathered enough data. You'll also get a lot more participants.

Remember that this is still a data trial. The objective is to determine whether this program will change customer behaviors. Also, because the trial will change among different products at different point levels, decreasing rewards later on will likely be less noticeable. But that's beside the point. If the initial trial is successful and it delivers the needed data, it will establish that behaviors can be changed. When you roll out the actual service later, the point levels will be disconnected from the initial trial.

Another factor to look at in these early trials is the novelty element. How many of these actions will be fun and intriguing in the beginning but will quickly grow old? Remember the search engine that automatically entered searchers into a lottery for cash and prizes? How does a chain distinguish between a gimmick, which will quickly lose its appeal, and a true behavior-changing service?

The premise behind the check-in services is that mobile can pull people into the stores again. But is that necessarily the right approach? Let's go back to that golf club scenario. If the prospect wants to buy a golf club, the Web might be the fastest way to close that sale. Why push shoppers into a channel if they're resisting? If prospects aren't sure about buying that club—or don't know which one they want—they're almost certainly going to look in-store anyway. They'll also probably go to whichever store is on their travel path.

If that happens to be Sports Authority, the trial is simply encouraging a visit that was already going to happen. The only real value is delivered when customers who are interested but still deciding are motivated by the check-in service to go to a sports chain that is outside their travel path. After the initial glow wears off, is that really likely to happen?

The whole premise of merged channel strategies (the final phase after multi-channel and cross-channel) is to allow customers to make their purchases in whatever channel is most convenient for them. A service that pushes consumers into a retailer's favorite channel is a throwback. But using it to get consumers who already want to be in your store to behave a certain way—such as making a particular purchase—is powerful.