I came across a very nifty little app which caught my attention this week. Checkout 51 (www.checkout51.com) rewards Canadians with cashback for buying certain items in grocery stores. The app is barely a month old yet can boast over 37,000 downloads, 40,000 coupons redeemed and #1 spot in the Appstore lifestyle chart. Those familiar with the likes of Quidco and other ‘cashback’ affiliates will know exactly how this works, but the twist here is that all the conversions are in the offline (ie ‘real’) world.

I think this is the first time I have seen a natively online business model transferring into the real  world. I’ve heard a few people refer to Checkout51 as ‘mobilised coupons’ but I’m not sure I agree.  Getting a check in the post is MUCH more satisfying for consumers than getting a buck off at the  register, psychologically. No, this app reminds me of cashback sites more than traditional cut-out-  and-keep coupons. Modern mobile technology makes the process incredibly simple. The user just  snaps a photo of their receipt with their mobile device camera, and any qualifying items are  recognized. Hey presto, their account is credited with the cashback. When I took a look, the list of  products on which cashback were available was a little slim, but this is to be expected from a  recently launched app. I am positive it will grow. I did see the Old El Paso dinner kit in there, with a  decent $2 cashback for every kit purchased.

Why would brands want to get involved?

Like the philosophy of online cashback affiliates, the idea is that a little incentive will make users a)    trial new products with lowered price point risk  b) ensure that brand hoppers stick to Old El Paso  every time and c) defend market share of existing Old El Paso consumers. It’s tried and tested, and  has been going on for years in the online space.  Better still, the data collected by Checkout51 every  time a receipt is scanned (stop for a moment and think about how powerful that is….just ask Tesco  who know more about a huge slice of UK consumers than the British government probably do), can  be used by brands for hyper-targeting of their offers based on previous purchase. Pretty neat. It  never ceases to amaze me how the public will forget about their privacy concerns and  give up everything on the first date so to speak, in return for a few bucks off a fajita.

What about users?

But is this really driving incremental sales? Isn’t it just people who buy the stuff anyway looking for a  cheaper price? Well, that’s the old claim, but it’s just not true. Truth is, cashback schemes increase frequency and loyalty amongst existing customers, and introduce products to new customers with a little cherry on top to make them take a risk and try something new. It lowers the barrier to trial. Sure, consumers might think they are getting paid to buy the stuff they would anyway, but that’s because they don’t notice their increased frequency and don’t notice when the stop buying a rival brand altogether because they’re hungry for kick backs. They like to think they’re smarter than marketers – and we’re generally happy to let them think that, as long as they keep buying OUR stuff!

Functionality wise the developers have got it right too, Checkout51 has a rating of 5 stars for the current update. Consumers are full of praise for the app, and rightly so.

Made In Canada

The coolest thing for me as a London bred marketing man now plying his trade in Toronto, is that this app is exclusively Canadian (for now) because it was developed by three smart guys, right here in Toronto. At a time when Canadian businesses and industries are really having to step up to the mark digitally, with the threat of US giants looking North, I love to see this sort of innovation and entrepreneurial thinking going on right here in Canada.

It’s only available on iOS right now but with an Android app in the works, I see bright things in the future for this business. Top marks to the guys at Checkout51!