As retailers look to gain a stronger footing in mobile with branded, standalone applications, the role of third-party check-ins is under increasing pressure to evolve as brands embrace newer forms of in-store engagement such as beacons.

A new report from Omnico Group this week finds that only 22 percent of retailers leverage mobile check-ins, indicative of how social and mobile in-store engagement has been sluggish to take off. At the same time, the hype around beacons and newer forms of in-store engagement continues to grow and could shift the focus of retail check-ins from third-party apps to branded apps to build loyalty.

“That’s the one problem with shopkick [and other third-party apps] — it turns into a game, which is great, but it doesn’t necessarily generate any true loyalty,” said Sheryl Kingstone, Toronto-based research director at Yankee Group.

“You’ve got some users that just won’t check-in,” she said. “That’s where if you do with some of the new Wi-Fi technologies or eventually beacon technology, it gives [consumers] a more valuable reason to pick up their mobile device and interact in the store.

Ms. Kingstone is not affiliated with Omnico Group. She commented based on her expertise on the subject.

Next-generation check-ins
Omnico Group’s “Shopping Experiences in US Retail” report also finds that 95 percent of retailers surveyed have store-specific social pages. However, few promote these social initiatives, and a measly 8 percent of consumers surveyed said that they engaged with retailers’ social sites in-store.

Big retailers including Macy’s, Target and Old Navy have all leveraged third-party check-ins through foursquare and shopkick, but the opportunities with these services is dwindling as the same group of retailers build in-store features into their apps.

As the role of in-store mobile engagement grows, retailers are clamoring for stronger connections with customers through these branded apps, and the rise of beacons and in-store technology only makes it easier for big brands to cut out the small third-party apps.

This is partly due to the first-party data that retailers can get out of their own apps.

Beacons and Wi-Fi are the newest ways that retailers are looking to spur some of these more valuable in-store interactions, but marketers need to be cautious to not bombard consumers with solely offers.

British retailer Tesco is one of the first retailers to use iBeacons to push customer service versus aggressive offers to app users (see story).

However, few retailers are taking this insight to elevate the shopping experience, including clienteling, doling out product information and accessing inventory in real-time.

“In-store check-ins are good for smaller retailers that may not have their own mobile apps, or the budgets to invest in beacon technology,” said Kamal Kaur, vice president of mobile at RadiumOne, San Francisco.

“But beacons definitely change the game for bigger retailers by giving them the ability to collect, keep and use their own data to drive in-store purchases,” she said.

Two of the more obvious use cases for beacons and in-store check-ins are targeted push notifications and stronger profiles of shoppers when they walk in-store. This type of data essentially makes a check-in obsolete, per Ms. Kaur.

However, retailers should be wary of completely nixing third-party apps because these platforms still have the kind of scale that marketers crave. For example, retailers could pull a foursquare check-in into a branded app.

“While I agree that these consumers are more aware of these other apps [such as foursquare], I think more has to be done around cross-channel engagement, education and just making the apps much more immersive and rich to make the consumer want to use your app over one of the ones that I call ‘social intermediaries,’” Yankee Group’s Ms. Kingstone said.

“I find them disruptive to the overall customer experience,” she said.

A screenshot of foursquare’s app

Tapping youth on mobile?
Omnico Group’s study also looks at the loyalty implications around how consumers interact with mobile devices in-store, including check-ins.

Unsurprisingly, the bulk of in-store mobile interaction comes from younger consumers aged 25 – 34 years old.

While these shoppers are clearly engaged in-store, they are not as loyal to brands as retailers may expect. Twenty-six percent of consumers between the ages of 25-34 years old and 22 percent of shoppers aged 18-24 years old said that they would buy something from a retailer’s rival site in-store.

Despite the challenges for retailers in luring and keeping younger consumers in-store, the report suggests that brands have a significant opportunity to turn these consumers into loyal shoppers if they choose to embrace technology.

One tactic that retailers appear to be neglecting in terms of loyalty is apps. Only 44 percent of retailers examined offered a loyalty app, which is a missed opportunity for retailers to hook a young and potentially lucrative group of consumers.

“Value-seeking customers want to be rewarded for their loyalty to a business. Loyalty apps can encourage shoppers into the stores and even to buy product,” said Bill Henry, CEO of Omnico Group, Duluth, GA.

“The data accumulated as shoppers use the app is also an invaluable resource when it comes to fine tuning marketing programs and making them as efficient as possible,” he said.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York