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Walk into the Best Buy on San Francisco’s Harrison Street, and the consumer electronics giant knows a potential customer has arrived: at least if you’re using the ShopKick iPhone app that launched earlier this month.

The startup, based in Palo Alto, CA, takes advantage of your smart phone’s keen hearing to bring location-sensing indoors, where GPS won’t work. Beacons smaller than a person’s hand fixed to a store’s ceiling beam out an ultrasound signal at a frequency that can be picked up by a cell phone’s microphone but not by human ears.

The app decodes the signal and contacts ShopKick’s database to work out where the user is, and to retrieve some sort of reward. The reward might be a credit of 50 “Kickbucks” (which can be traded for gift cards) for visiting the store, or a discount code for a particular product. The data profile that a user builds up with the app could also be used to target more relevant offers. For privacy reasons, this tracking information isn’t tied to a user’s real identity; instead, it’s aggregated anonymously.

“This offers the consumer a new kind of interactivity,” says ShopKick CTO and cofounder Aaron Emigh, “and speaks to retailers about their most important measure of performance: foot traffic.”

Apps like Foursquare, Gowalla, and the newly launched Facebook Places have shown that some cell-phone users have an appetite for sharing their location. But the limited accuracy of these services–and the fact that they do not work well indoors–makes the data they produce less valuable to operators of bricks-and-mortar businesses. “These apps are really about vicinity, not location. We can’t really know if you’re there or driving down the street a block away,” says Emigh, “ShopKick can truly detect if someone is present at a location.”

The app is currently available only for the iPhone, but an Android version will appear “soon,” he says. He adds that tests on every common smart phone revealed “literally only a couple” that can’t detect the ShopKick beacon. This ultrasound beacon emits a signal that phones can identify from up to 150 feet away, says Emigh, and the nature of buildings neatly confines the signal to inside a store. “You can really tell which side of a door someone is on.”

For now, ShopKick is rolling out beacons simply to tell if an app user is inside a store or not. But they have also demonstrated how the approach could verify a person’s precise location–for example, a particular aisle–enabling the app to tell a person to visit a specific section of the store where they will receive a particular coupon or an extra slew of points.

Triangulation (comparing several signals to pinpoint a device’s location) is also possible with acoustic signals, says Emigh, and it is possible for a phone to detect the signal even from inside a pocket. “Because we want to be careful about privacy, for now we’re not monitoring for the ShopKick signal except when you’ve opened up the app,” he says.

Josh Marti of Point Inside, a Bellevue, WA, startup that offers indoor mapping in spaces like airports and shopping malls, agrees that pinpointing users more accurately, especially inside buildings, will be important. “The market is heading away from ambiguous ‘check-ins’ [using a location-based app to say you’re in a particular place] toward feet across the threshold.”

E-commerce sites can use cookies and other technology to gather valuable information about a person’s browsing habits and target promotions based on their interests, says Marti. Indoor location fixes now make this possible for bricks-and-mortar retailers, he says. Emigh agrees: “We like to think of it as a real-world click,” he says. “This has never been possible before.”

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Credit: ShopKick

Tagged: Communications, Facebook, mapping, GPS, location services, location tracking, foursquare

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