What began as a swift response to local businesses’ dwindling sales during the pandemic has grown into a “happy miracle” the city intends to keep permanently, officials say.
The Akronite app, a points-based program that rewards users for shopping locally, is here to stay, says Deputy Mayor of Integrated Development James Hardy.
“Originally, this was a pandemic-driven initiative with a short shelf life,” Hardy says. “We were wrong. It’s turned out to be a popular program. The return on investment speaks for itself. We’re happy with it and happy to continue promoting and working on it.”
Since the app’s launch in August 2020, more than 4,000 users and 170 local businesses have participated in the points-based rewards system for spending dollars locally. Customers are rewarded for each in-person and online purchase they make at participating local businesses through points, or “blimps” — a nod to the Goodyear blimp. Each blimp is worth $1 that can be redeemed at any location. At the end of each month, the city reimburses the businesses for rewards they accepted.
In the six months of app usage, developers and the city have tracked economic stimulation generated by Akronite, reporting over $200,000 in economic activity. That number comes from all money spent and redeemed at businesses with cards linked in the app.
There are currently 170 merchant participants with a projected estimation to pass 200 by the end of the quarter. Hardy says his department has been working to push the effort from Downtown and University Park where a majority of businesses were clustered when the app launched.
Hardy says there is no limit to how many businesses can become partners, and he hopes to keep expanding participation. It is free for businesses to join.
“It’s going really good for us over here,” says Liz Greising, a manager of Acronym Brewing at 58 E. Market St. “Not only are a lot of regulars happy about it because they’re able to have that cash back, but I’ve definitely noticed people are going out in the Downtown area and racking up the points from other businesses. … I think it’s a cool system. And for us, there’s no negative or downside.”
The app, developed by Colu, which launched similar government initiative rewards apps in other countries, cost the city $32,500. Akron also budgeted $30,000 in redeemed blimps, with an additional $10,000 from Colu to help the app succeed.
So far, about $16,500 of that $40,000 in payouts has been redeemed, though the city has almost fulfilled all the allotted money in issuing blimps that have not yet been used.
Though rewards may surpass initial investments, Hardy says the city can and will backfill the rewards budget to “keep the momentum going” from various sources, such as remaining CARES Act funding.
Ongoing operation for the app costs about $100,000 per year plus rewards from the city, but so long as businesses continue to see positive results, Hardy says the city is “happy to pick up more of the cost.”
Hardy pushes back on arguments suggesting customers would have spent money locally regardless of the rewards system, saying, “If you went through the trouble of downloading the app, linking your card, seeing what businesses were involved, we think the rewards have some part to do with it.”
Akronite is Israel-based Colu’s first endeavor in the United States, and the city has received national recognition and interest for an app rewarding local business. Entrepreneur Andrew Yang, who ran a 2020 presidential bid, cited Akronite as a model for replication when it comes to rewarding local spending in his policy platform for New York City mayor.
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“Whether we intended it to or not, it’s become a model that’s of high interest to other municipalities,” Hardy says, citing calls with at least 12 other cities — including large metropolitan areas such as Boston and Chicago — looking at similar models of rewarding local, cyclical economic growth. “It’s a happy miracle that what was a quick pandemic response to launch the app and program has turned out to be both popular locally but interesting nationally.”
Long term, the city is aiming to reach 10,000 users and a healthy cycle of businesses and patrons keeping dollars local.
“As long as the businesses are finding value, as long as users are using it and we’re generating positive local economic return, we’ll keep doing it,” Hardy says.
If your local business would like to participate or become a corporate sponsor, contact the Office of Integrated Development at 330-375-2133.
Abbey Marshall covers economic development for The Devil Strip via Report for America. Reach her at firstname.lastname@example.org.