You walk into a store or business and are presented a compelling offer.  The restaurant wants you to order appetizers and will sell those at half price if you buy one today.   You get a good deal and the restaurant gets you exposed to more of its menu.  Loss-leaders are not a new concept in retail but location-based services are extending and enriching this tactic considerably.  

Apps like Foursquare and Gowalla run over iPhone and leverage location, making it easy to present these offers to you instead of someone having to approach you, which can be kind of awkward.  But there’s a lot more to it.  Making the loss leader (aka, the offer) a digital activity is now advantageous because they can be linked to social networks.  Your digital activity has more legs to it because the word can easily be spread to people you know, and this deserves a premium.  The gaming dynamic is a separate lever in the mix too.  Even if you had no word of mouth capability, merchants are finding it valuable to provide incentive around the frequency of your engagement with them.  You need only show-up a lot (aka check-in) to earn benefits like prizes and discounts.  That’s different than actually buying stuff, but pretty similar conceptually to the idea of Loyalty Card (get this card stamped 10 times and your next sandwich is free).  

Finally, there’s the actual intent you have when visiting a store or taking advantage of a certain discounted item.  CPG companies know this landscape well – they’ve been pumping custom coupons at the grocery store cash registers using analytical firms like Catalina Marketing for years.  You like organic milk and all-natural cake mix, so no coupons for Doritos and Oreos will appear on your receipt.  Then there’s brand new territory like throwing an event for you and people like you – affinity groups.  Maybe this is a spin on the retail concept of catering, except more ad-hoc and less structured.   

Foursquare CEO, Dennis Crowley, hinted at examples of this at the Where 2.0 event last week (restaurants pushing offers to Foursquare users to gather at specific times or user self-organizing).  This could be extended considerably down the line – all the people who have certain status, ranking or badges get to experience something special and unique at a certain time at the venue.  Influencers will gather to be specially treated and then happily spread the word (mashing-up the event and loss-leader).

Yes, social media is throwing a tizzy into stale concepts with Foursquare, Gowalla and Loopt leading the way.  The potential to re-architect existing retail consumer engagement is already happening and the new possibilities are just as inviting.  Get ready to be consumerized in new and interesting ways. 

Tell me what you want to hear about next.  Tweet @atifatif and vote for one (or more of the following):

1. Will offers and incentives vary depending on the strength or size of your social network?

2. What’s the best way to determine mayorship?

3. Will we be gamed to consumer oblivion?

4. Is there value in the Foursquare / Gowalla VISA card? Read more »

Related Links

• Pixels And Salsa: Adobe And Chipotle Play Gowalla's Game
• What Did The Location War Look Like At SXSW?

Filed under: Events, Web Apps, Social Media, Local | 7 Comments »

Email It   Digg This!   Slashdot It!

Kelsey Group puts on the Interactive Local Media conference every December.  While I’ve spoken at these events for Yahoo! in prior years, this time around I was happy to sit back and attend a few sessions.

It’s clear that local, mobile and social are coming together in very interesting ways.

Some takeaways from some of the panels and side conversations at the event:

• Facebook has over 900K fan pages for local merchants according to Backyard, a Facebook app provider that is set to launch.  While there are over 15mm local merchants domestically, many of these Fan Pages are concentrated in categories like restaurants and nightlife - so that coverage is actually pretty decent.  These pages are potentially disruptive to traditional “directory style” merchant profile pages.

• Kelsey Group estimates 9% of local businesses have a Twitter account.  It will be interesting to see what differences emerge for businesses as they build followers on Twitter and fans on Facebook.  One potential differentiation - Twitter for truly real-time updates (something happening now - like open late today, perishable inventory, big crowd watching the game here now). Meanwhile, Facebook might be more on the community building side of things - what do my friends think and recommend, who’s planning to go there when, etc.   Building a direct marketing channel to customers is different than playing in a community-based sandbox that happens to be about your business.  Facebook already allows admins for Pages to cross-post to Twitter. Read more »
  
  Related Links
  
  • Yahoo and Facebook Connect
  • ILM '09 Overview
  • SMB's Embracing Twitter

  Filed under: Events, Web Apps, Yahoo!, Local | No Comments »

  Email It   Digg This!   Slashdot It!

TC50 has been going on these last few days.  I attended on the final day of presentation which covered new apps in the Social Stream, News & Discovery and Commerce Marketplaces areas.

I love this event for the unbridled, youthful energy of the entrepreneurs and their followers.  For that rare and exciting idea, the momentum generating potential of success at the conference is huge.  Everyone here is networked and more important, willing to shout it out.  If something is compelling, it can catch fire quickly.

The hit rate on quality ideas appeared fairly low.  Are we nearing a trough for high impact web 2.0 ideas?  I think it’s a period for creating tactical businesses.  Those which fill a targeted need and do it well.  Ideas that leverage, or live within, the existing tidal waves — Twitter, Facebook and iPhone/mobile.  No game changers or companies who become verbs.   There are endless and growing number of opportunities in that domain.  I like concepts that package convenience around existing and emerging user behavior.  For example, there was a company that had a mobile app for ordering from concession stands in stadiums and venues.  The conference winner, Red Beacon, a referral and matching service for local services (plumber, personal trainer, contractor) intends to do exactly this albeit in a crowded space.  A related company that is launching which I think will do very well because of its market focus in Save Energy 123.  This site advises homeowners on energy-saving projects and matches them with local products and service providers. Read more »

• TC50 Winners
• Participating Companies

Filed under: Web Apps, Innovation, Local | No Comments »

Email It   Digg This!   Slashdot It!