Challenge 3: ShopKarma

by post_author

A shopping app that teaches teens how to save

by Catherine Le and Alethea Campbell

View slides here: http://tinyurl.com/ES22-SK

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Full write-up here

Our app is called ShopKarma (SK), a shopping and budgeting app that uses the “cash-back” feature to encourage incremental savings that manipulate teens’ existing online shopping habits to form saving behavior. Since teens are already overspending on online shopping, an app that allows them to save money on each purchase is desirable. Ebates.com is an existing service that SK could partner with to form a viable business in which retailers are incentivized by more promotion.

SK’s interface is similar to Venmo in having a social sharing feature and ability to hold a balance to later deposit into your bank account. SK would feature stores available through Ebates and at the end of each month, users can deposit the balance into a savings account. SK would partner with banks to match this cashback amount by 1% if you save up to $100 a month – users can add what’s left over from their “fun budget” to meet this requirement and save more money.

The SK algorithm would work similarly to both Instagram and Spotify. Those who used the app more would become a more desirable user and receive better rewards, and featured stores would be chosen in a way comparable to Spotify’s music choice suggestion based on purchase profile.

At the end of every month, each user would be provided a graph to see what their savings would become after benchmarks (e.g. high school/college graduation), a number often used in the ‘future self’ thinking model. This model would teach users how to limit spending by thinking about budgets, compound interest, and savings goal without financial jargon or difficult habit forming. This service takes away the need to remember to save; it hooks users with the desirable reward of saving gradually for large end gains by nudging them naturally. Saving can begin as early as age thirteen and young people can become more mindful of saving if we provide an intervention – a positive change in a negative routine of overspending that hopefully establishes basic financial literacy and a habit of saving.

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