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Are foursquare changes enough to hold onto its seat at the table?

June 8, 2012

Foursquare adds ratings and recommendations

The bloom came off check-in applications a while ago and now foursquare, a significant force behind the trend, has unveiled a significant update that takes the focus away from check-ins and places it on making the app more of a recommendation engine.

Dedicated check-in apps have either disappeared completely or undergone significant overhauls in recent months as the category has lost steam. In the updated foursquare app, the focus will be on an “explore” button which users can click on to find personalized suggestions for where to go.

“The app redesign keeps Foursquare fresh; both for current users and in the news,” said Jay Hawkinson,  partner at SIM Partners, Evanston, IL. “This is significant because Foursquare is finally doing something with all that historical check-in data to improve the app and provide enhanced value to its users.
“More than just remaining competitive, it keeps them relevant amidst the Instagrams of the app world,” he said.

Ratings and recommendations
The app will deliver recommendations based on the time of day, how popular nearby locations are and what types of places a user tends to check into. For example, if someone checks into coffee houses a lot, the list of recommendations will not focus on local bars.

Users can also submit a positive rating for a location that shows up as a little red heart in the listing.

Ultimately, what foursquare is trying to do is harness the rich data it has collected about users and locations and turn it into something that is useful and will keep users coming back.

“Foursquare didn’t rise above the noise and change fast enough,” said Brennan Hayden, vice president at Wireless Developer Agency, East Lansing, MI. “If you look at companies like Facebook and Twitter, they change things up a lot.

“It is a double-edged sword because people have to get used to the new thing but the catch is if you don’t change, you don’t stay relevant,” he said.

“It is hard to say if the latest change is going to be enough but one thing is sure – they had better be back in three months making another change.”

There have been signs that check-in apps have been facing tough times. Loopt, Gowalla, Whrrl and others have all disappeared while Foursquare first announced a couple of months ago that it would change the focus of the app.

The company has also reportedly lost some key personnel in recent months.

One of the challenges faced by check-in apps has been around their ability to keep users coming back repeatedly.

Another problem was that check-in services did not evolve far enough to become a standalone service. Today, many retail apps and other apps use check-ins as a feature in their apps, enabling them to track user loyalty and understand in-store behavior.

The addition of Explore tab, which compiles data over the history of a user’s check-ins to provide recommendations, could be useful for marketers.

“Savvy marketers will do more to increase visibility and maximize check-ins in hopes of getting a recommendation,” Mr. Hawkinson said. “Foursquare won’t say how the recommendations are determined but it’s safe to assume that if a business isn’t getting checked into, it’s probably not going to get recommended.

“Offering users recommendations may give businesses who engage with Foursquare an edge and ultimately start using ‘as recommended by Foursquare’ as additional validation to promote their business,” he said.

Location services heat up
The new update could help foursquare address some of these issues by providing users with relevant information they want about local businesses. However, the app faces some stiff competition in this area, with Facebook, Google, Twitter, Yelp and Groupon just a few of the companies now focused on providing location-based offerings to mobile users.

“Foursquare has lost some time but they do have recognition,” Mr. Hayden said. “If they came up with something compelling, they wouldn’t be starting from scratch.

“They have a huge user base with which they can test concepts,” he said.

Another opportunity for foursquare could be in creating an app that would safely allow users to share their location for rides and other activities, per Mr. Hayden.

“In mobile, there is no stable ecosystem so companies like foursqure have to create a self-contained audience,” Mr. Hayden said.

“From a marketers standpoint, how do you piece together all of these self contained audiences into something that is scalable,” he said. “That’s the challenge of marketers and the challenge of foursquare, how does foursquare become valuable enough at its current size to a marketer?”

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