Mobile applications that drive customers into the stores have great value for retailers. But simple gimmicks cannot hold consumers’ attention for long—and may even annoy them—such that their retention rate is poor, regardless of the number of downloads. Instead, customers like using applications that are fun, convenient, and helpful in terms of making their tasks easier.

Walgreens’ successful mobile application has a simple primary goal: improve convenience for customers. Before customers even get in their cars to go to the store, they can order a prescription refill or choose specific photos they want printed from the roll they dropped off last week. The application also includes a feature called “Refill by Scan” that lets customers scan their medication’s bar code with their smartphone camera to order their refill. Customers then can change their store pickup locations if needed and select the pickup date and time that is convenient for them. When the prescription is filled, the store sends the customer a text alert. Thus the application drives traffic to the stores by helping them get through the stores more efficiently. More than 1 million people already have opted in for such alerts.

Other retailers turn to Shopkick, a location-based application that partners with the retailers to encourage customers to check in at the stores by rewarding them with points and coupons. Unlike Foursquare or other location-based applications which estimate your location within 1000 feet, Shopkick communicates with a specific sensor in each store, ensuring you are actually in the store. Customers automatically receive points or “kickbucks” when they enter the store, and retailers know exactly where the customer is. To encourage customers to browse, various location hotspots grant them additional kickbucks when they enter the target area, whether the electronics department or housewares.

Some of the biggest names in retailing—including Target, Best Buy, Macy’s, Crate & Barrel, and American Eagle—thus pay Shopkick a fee each for each customer the application gets inside their doors. Some of that fee goes back to the customer: They earn 75 kickbucks just by entering and can earn more if they purchase products in the store (875 kickbucks are equivalent to a $25 gift certificate). Then they can instantly redeem their kickbucks by downloading the rewards to their smartphones and presenting the downloaded information at the register.

How do mobile applications improve the customer’s experience with a retailer?

Sandhya Raman, “Shopkick’s CEO Talks Entrepreneurship, Mobile Marketing and the Future,” Fiercemobilecontent.com, May 10, 2011; Adam Ostrow, “How Accurate Is Your Smartphone’s GPS? [MAP],” Mashable, March 9, 2011; Rimma Kats, “Walgreens: Mobile is Key Component of Multichannel Loyalty Strategy,” Mobilecommercedaily.com, March 4, 2011.