I watched a short video this past weekend on Business Insider that featured Shopkick co-founder and CEO Cyriac Roeding who spoke about location-based services (LBS). In the video, Roeding provided a simple explanation that mobile LBS applications generate value for retailers by generating traffic. True and personally not too surprising consider how I noticed that my initial interaction with Foursquare was an odd game where I felt motivated to consume by checking-in at new places.

While earning points or rewards can make the check-in experience entertaining and interactive, LBS applications take it a step further by allowing shoppers to expose a storefront and/or products to an entire network of friends. Knowing that we tend to socialize with friends with similar values, tastes and interests, retailers can expect that the exposure will not only bring foot traffic but it will actually attract shoppers that are motivated to make similar purchases. Considering that retail sales were relatively flat in August according to MasterCard Advisor’s SpendingPulse (August 2010), retailers should be looking for every trick in the book to encourage consumers to open up their wallets this final quarter of the year and beyond.

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