Shoe leather markets

I recently saw the Foursquare sign below at Wolf / Ritz Camera on Market Street in San Francisco. I asked, and they said the parent company had provided it. Someone at Foursquare must have done the retail deal.

Foursquare at ritzpix

A lot investment dollars, and print ink, have gone into check-in-style mobile social networks, such as Foursquare. They’ve truly flipped the location dynamic on its head through what industry folks typically call gamification, or adding a game or contest mechanic to apps to encourage user participation. Foursquare, Booyah, Gowalla and Shopkick are examples of apps that provide incentives for users to share where they are, either intangible benefits (such as being “mayor” of a store on foursquare), or tangible benefits, such as retail discounts. This encourages repeat app use and thus prevents users from trying an app a few times before growing bored. The flipside of this, of course, is that the app needs to be open and the user needs to think of the app at such time that they are in the retail store.

I remember the consumer privacy concerns that Wireless E911 regulations first elicited and then the uproar that followed Wal-Mart’s announcement that it would adopt RFID. (I guess privacy advocates thought Wal-Mart was also going to roll out RFID readers all the way back to consumers’ houses.) People didn’t like the concept of being tracked, and we certainly dealt with that reaction during my time at Rosum. To wit:

Kurt Opsahl, staff solicitor at the Electronic Frontier Foundation in San Francisco, said Rosum apparently would operate a location server that will be able to record the movement history of any device being tracked.

If the Rosum technology eventually is built into mobile phones or other popular gadgets, the government could subpoena Rosum’s customers to track anyone’s movements.

“This is another step toward a surveillance society,” said Mr Opsahl. “They could get your traffic patterns. This is fairly sensitive information.

(I happened to be at a BBQ with 3 or 4 EFF lawyers not long after that article came out. At first, they truly seemed to think the devil was in their midst. Boo!)

So, amidst those privacy considerations, the driver for LBS apps was simple: “Where am I?” “What’s near me?” And later, “Where are my friends?” Now, the driver has changed to, “I am here, what is my reward?” This is a landmark achievement from a marketing perspective, but also a safety and privacy perspective. Consumer researchers have spent millions upon millions trying to figure out how consumers think and where they go. Now, at least a subset of consumers offer that information up. For free. Amazing.
Sam Altman, CEO of Loopt, has said that no one under the age of 27 cares about privacy. He said that in 2008, so I guess that border would be age 29 now. They just assume there is none. Perhaps this is true.

Still, I will sound a sober note. OpenTable, for many, is the default way to make a restaurant reservation. OpenTable raised $100M, had one recap, and went public after 10 years. In the end, the shoe leather investment they made paid off and they have tremendous lock-in. The road to comprehensive retail integration is long and arduous.