Foursquare To Open Online Store
The popular social network is building an online store for T-shirts and other branded products. — It's no secret that Foursquare users are a devoted group, often “checking in” to the location-based social network multiple times a day.
Context & Ripple Effects
Foursquare enters mid-2010 with momentum and questions about its business at the same time. The check-in network added roughly 100,000 users in ten days around its March SXSW push, reaching about 600,000 total, and its reward-for-checking-in model was already being framed as Foursquare's twist on Facebook. It sits inside a confirmed land rush that has Twitter, Google, Foursquare and rival Gowalla all racing into the location space.
The merch store announcement lands against a tense backdrop: Foursquare reportedly held acquisition talks with Facebook — unconfirmed — while securing a confirmed bridge investment round in June 2010 after early months marked by technical outages. A T-shirt storefront is small money by any measure, but it is the company's most visible step toward showing revenue exists independent of a buyer.
First-order effects
- Foursquare gains a direct-to-consumer sales channel for T-shirts and branded goods, giving its most devoted multi-check-ins-a-day users a way to spend on the brand rather than just earn badges.
- With a rumored Facebook acquisition still unconfirmed and a fresh bridge round in hand, the store gives Foursquare a demonstrable, if modest, revenue line to show investors and any suitor.
Second-order effects
- Rivals in the location land rush — Gowalla chief among them, alongside Twitter and Google's efforts — face pressure to answer with their own community-monetization moves rather than competing purely on user growth.
- Brands already rewarding check-ins get a template for extending their relationship with Foursquare's audience into physical merchandise, deepening the merchant side of the network.
Third-order effects
- If the pattern holds across the location space, check-in networks will be judged less on raw user counts and more on whether a devoted community converts to direct spending — the earliest stage of turning social loyalty into commerce infrastructure.
The trend: As the 2010 location-services land rush intensifies, fast-growing check-in startups like Foursquare are beginning to convert passionate user communities into first direct-revenue streams before acquisition or funding outcomes settle their fate.