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Summary:

Geo-location check-in services such as Foursquare are super trendy in tech and new media circles. But will they catch on with mainstream audiences enough to make big retailers pay attention? A new market research study indicates that the answer may be no.

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Geo-location check-in services such as Foursquare have been hugely popular in tech and new media circles in recent years. But will they catch on enough to make major consumer companies include them in their marketing budgets? A new market research study indicates that the answer may be no.

Check-in apps may not click with the mainstream

Fashion company Liz Claiborne Inc. recently commissioned a quantitative study of shoppers to find out how their customers use mobile commerce tools. While the majority of participants were enthusiastic about using some smartphone applications such as mobile coupons and product search, they were decidedly less bullish about social location apps. Only 30 percent of those polled saying they expected to use mobile check-in services while shopping more often in the future than they do right now.

In fact, out of the seven actions researchers asked about, mobile check-ins were the least popular:

Study conducted by Group SJR for Liz Claiborne Inc.

This may not bode well for check-in startups such as Foursquare, which recently talked of future plans to charge merchants money to offer deals at their shops. Liz Claiborne’s senior corporate communications VP Jane Randel said in a statement that her company is not exactly keen to spend money on a potentially ineffective service:

“Our research made clear that direct benefits are in – from deals to relevant information and content – while the value of check-ins is in question… The bottom line is that consumers are getting smarter about using their smart phones, and don’t want to mess with apps that don’t offer real rewards. If they’re going to have to pay to play, now merchants need to be smarter than ever and make sure the benefits provided to consumers outweigh the new Foursquare costs.”

Foursquare is up for the challenge

But the study’s findings are not likely to take check-in startups completely by surprise. For its part, Foursquare has acknowledged that people aren’t just checking in for the fun of it — they want deals to follow. Foursquare has recently inked partnership agreements with coupon sites including LivingSocial and Groupon to tie check-ins more directly with discounts. Going forward, Foursquare and its peers could probably stand to better communicate to potential users that check-ins are often accompanied by perks.

It also bears mention that people don’t always know what they want before they want it. Five or so years ago, many people dismissed new social media applications such as Twitter and Facebook as completely useless and destined for failure, and both services have since gone on to become household names. Foursquare recently closed on $50 million in new funding, so there are a good deal of smart people — with big money — who believe that check-ins have a bright future ahead.

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  1. Lucian Armasu Tuesday, August 2, 2011

    They should take advantage of NFC once it arrives. Checking it seems cumbersome the way it works now. If they made it so you only had to take out your phone and point it to the door before you enter or leave, or something like that, it would be much easier, and probably more people would do it.

    But then there’s also the part about the benefits. What’s in it for the user? They need to be compelling enough to make him do that everywhere he goes, and I don’t think virtual achievements are enough.

    1. The NFC angle is a great one, Lucian. Thanks for weighing in!

    2. I agree with Lucian here – what’s in it for me? As a user, Foursquare (and the merchants leveraging the platform) have to provide adequate incentive for me to pull the phone out to check in. True – technology may be able to streamline this for me, but that will still require a certain level of user sophistication to configure it properly (I’m guessing people won’t want to grant an app permission to check them in carte blanche). Give me a reason to overcome the inertia, and I’ll do it. As merchants begin to clarify the value of a check in for their business (tracking buyer behavior, identifying best customers, posting activity to social networks to get ‘word of mouth’ advertising, etc.), they’ll be able to craft the type of offers that may overcome consumer reticence. While check in is near the bottom of the graph, use of a mobile coupon is near the top. Combining those two will likely be key, and I think Foursquare is already on that road.

  2. It has never been clear to me — or anyone I know in the 35-44 demographic (or older) — why check-ins are interesting. And quite frankly, little dribbles of loyalty points are not really going to change that equation. (It’s also not clear why merchants should offer them. I’m in the store, why are you rewarding that behavior? If I went in to get the reward, I’m not really there to shop. If I went in to shop, why do I need some tiny reward?)

    I do agree that providing me some instant feedback upon arrival is a great idea/app. I’m in Safeway, tell me what’s on sale that I buy. I’m in Old Navy, tell me that those t-shirts I like are 2 for 1. This is good stuff, but it’s not really “check ins” per se, it’s location-aware commerce. Sort of Shopkick without all the suck that currently exists.

    There’s a reason Foursquare has been around for quite a while and makes no money.

  3. Do you have the link to the full report? It may be the case that check-ins will eventually go away, but if they’re only surveying the Liz Claiborne demographic, I don’t know if you can really make any conclusions from that chart alone. IIRC, women are more likely to use deal sites like Groupon and less likely to use check-in services in comparison to men.

    1. I actually don’t have a link right now; I received the report in PDF form. I’ll try and track down a link for you.

  4. Virtual achievements won’t cut it. I use both Gowalla and Foursquare now in hopes of future rewards but companies have been VERY slow adopting either service. At some point I’ll stop checking in until I see greater adoption.

  5. First, I question the study. If consumers are so eager to scan barcodes, why did Stickybits (a barcode-scanning app) crash and burn while Foursquare (a check-in app) has enjoyed Twitter-like growth? It also misses the point that Foursquare and other check-in apps are also mobile coupon and mobile deal apps, together with other features like intelligent recommendations.

    Secondly, one of the biggest reasons Foursquare has been successful is that it provides a basic utility i.e. contextualized status updates about where you are. To the author’s point, YOU may think that’s silly or ridiculous, just as many did with Twitter in the early days, but it’s providing this utility to tens of millions of consumers on a daily basis (together with Facebook Places). So that’s the baseline value. Is it enough for the mainstream? Perhaps not. That’s why there are additional incentives.

    The success of Facebook and Twitter, beyond providing the basic utilities of status updates, broadcasting, and photo sharing, can be linked to how brands have participated in these platforms. Brands have provided engaging consumer experiences. Consumers were already engaging with brands on Twitter and Facebook long before the brands took notice and reciprocated those engagements. The same is happening on Foursquare today.

    People are checking-in and sharing brand experiences at a rate of three million check-ins per day on Foursquare, according to the company. Very few brands, however, are monitoring, measuring, acknowledging or reciprocating these brand engagements. Part of the problem is scale, which Foursquare is addressing at a rate of one million new users per month. The biggest problem (in our humble opinion) is that brands don’t have the proper tools to manage this new medium.

    Brands have been successful on Facebook and Twitter, but it hasn’t been managed via Facebook.com and Twitter.com. Third parties have provided the management solutions via the companies’ APIs, and this efficiency has led to further value and consumer adoption of these services.

    MomentFeed is the third-party solution for managing various location-based services like Foursquare and Facebook Places. We’re providing the enterprise-level toolset to monitor, measure, and engage with consumers across hundreds or thousands of locations. In turn, we’re helping brands provide the value consumers are looking for when they check-in (when they engage) as well as the ROI brands are looking for from these services.

    The basic premise could not be more compelling. When a consumer checks-in, they are both present at the point of sale and engaged with the brand. Remember, this is in the context of a basic status update utility, which provides the habitual underpinnings. (This is where pure-play deal apps miss the boat.) Because we were using Facebook and Twitter as basic utilities long before they became brand-engagement channels. Given this baseline of organic check-in (engagement) activity, brands have an opportunity to incentivize this behavior and effectively leverage this new marketing channel via smartphones in the physical world just as they did with Facebook and Twitter via browsers in the online world.

    They just need the proper tools.

  6. Amelia @ International Business Wednesday, August 3, 2011

    I am lukewarm when it comes to check-in applications such as Foursquare. Right now, I don’t see much value in them, but I’m pretty much interested to know how Foursquare’s decision to generate revenue would play out.

  7. Full disclosure: I am the Community Manager for Life360 – makers of the Life360 Family Locator app

    “Check Ins” that deliver true value will continue to grow in popularity, whether it’s social or safety. In meeting the end user’s needs by giving them a deal on what they’re looking for where they are at that time or by providing location information that the kids have safely arrived home after school, adoption and usage of check-ins will increase.

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