Location Services Jazz Up the Check-In for the Holidays

The location wars are heating up just in time for the holidays. Location-based services such as Foursquare, Gowalla, SCVNGR, Yelp and others have brought out the big guns, leaning on big-name partners and expanded rewards to help give their check-in services a big push at the end of the year.

This comes at a pivotal time for the industry, which has seen a lot of growth in the last year but has yet to penetrate the mainstream. A recent Pew study found that only 4 percent of Internet users have used a location-based service, a 1 percent decline from earlier this year. Some are now calling on location-based services to cut the schtick about making check-ins fun, and instead offer people what they really want: deals.

That’s the conclusion of a recent JiWire survey of wireless users, 29 percent of whom said check-ins have the most value as a source of coupons or deals. Facebook also expanded its location service, Places, by offering local deals earlier this month, putting more pressure on rivals to up their game. Not everyone is expanding their rewards offerings, but most are kicking off a number of similar moves to highlight the power of the check-in. Here’s a look at what the players are doing:

  • Foursquare signed a deal with Pepsi (s pep) and grocery store chain Safeway (s swy) to pilot a rewards program that ties into Safeway’s loyalty system. When users who have tied their Facebook Foursquare account to their Safeway loyalty card check-in somewhere, they will get personalized offers for Pepsi products that can be redeemed at Safeway locations. The move makes a lot of sense, because it ties Foursquare into more tangible rewards than just badges, and builds on an existing relationship with users.
  • Gowalla has teamed with Disney Parks (s dis) to offer more than 100 individual stamps for users who check-in at Disney’s amusement parks. The stamps will allow users to build a little digital passport for their trip. While the brand name association is nice, however, this is likely to affect few users and may do little to give Gowalla a spike in check-ins.
  • TopGuest is working the rewards program angle and recently announced partnerships with Virgin America, Hilton Honors, Wyndham Rewards (s wyn) and others. There are now some 10,000 locations where TopGuest users can check-in using their favorite check-in apps. TopGuest gets the idea that the check-in isn’t the main course — it’s the appetizer — by grounding the service in the programs people already use, it makes the benefits of location services more real.
  • SCVNGR, a location service that invites people to play and create games, signed a deal with Coca-Cola (s ko) to bring rewards to users who check-in at Simon Malls. If users complete challenges — some Coke-themed — they are eligible to receive rewards like a bottle opener or gift cards. The deal is nice for the name recognition, but it seems somewhat unrelated to a visit to the mall. That’s where things are really interesting, when rewards are contextual and relevant.
  • Yelp is upping its game by offering check-in rewards for the first time. The offers aren’t too different from what you might see on competing services, but Yelp has a strong following used to firing up the app when out on the town looking for places to go.

Location-based services can still have a bright future. Despite the slower adoption numbers so far, they’re not far off from the early numbers of Twitter. But like Twitter, location-based services will have to get over being looked at initially as a novelty. As Twitter evolved, it became a key communications tool for millions of people, who saw the value of how Twitter helped the flow of information. Location-based services need to get beyond the badges and show people the money. Or they need to ratchet things up and really become something more lasting and personal, something like Hashable, which tries to measure the strength of our relationships.

The players seem to know this. Dennis Crowley said earlier this month that Foursquare will evolve to offer more personalized recommendations based on a person’s check-in history and better specials and deals. Now it’s just a matter of Foursquare and others thinking bigger and executing. The holiday promotions are a good sign that they’re learning, but they need to go well beyond that if location-based services are to reach their potential.

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