CASHBACK IS THE NEW BLACK
Ecommerce sites should stay ahead of the game
I definitely consider shopping as one of the best activities of all time. Everyone at some point takes some time to shop. And for those who don’t like crowded shops, queue lines or fitting rooms you can refer to our latest article “How high street shopping became online shopping”.
Yes, online shopping had become something common mostly because there are many discounts available 24/7. Discounts have been more and more present these days; in a way, everybody is trying to find the best deals. This is demonstrated during sales periods. Indeed people rush outside to spend their money twice in a year as sales occur once in winter and once in summer.
However, I would like to talk about a new trend that is, to my mind taking over discounts. This fast growing phenomenon is called ‘cashback’.
It all started with credit cards. Some were giving away cashback in percentage of the amount spent with a card in a defined time. Many surveys showed that people were choosing their credit card according to this feature. Well, the same has occurred with ecommerce sites. It is a new concept in which I believe will last for a long time. In fact, there are many advantages to cashback on the consumer and the business side.
Many retailers such as DiscountIF generate cashback offers. Cashback may take the form of a voucher or coupon to spend on the site, or it may also be offered in the form of money.
To my mind discounts are now old fashioned. It became a common thing to receive a discount on retail sites. There are even some that guarantee discounts on each purchase such as Hot UK deals, which is the top discount site in the UK. In my opinion I am not that much attracted by the usual ‘10% discounts’ anymore.
One of the main goals for retailer sites is to make as much sales as they can and in my opinion, cashback is an efficient and innovative tool to fulfill this goal. Cashback is a means to conversion. Indeed consumers find the idea interesting and they are often willing to try this new service.
When shopping, many people fill their basket and then have to edit it or just leave the page considering it is too expensive. However cashback could help to drive the consumer towards check out. As an online shopping addict I spend my time browsing sites such as ASOS, adding stuff in my basket and then forget about it.
But with the cashback offer, I tell myself “well you will be receiving some money in any case so go for it”. And this doesn’t only work with me; it has been proven that with offers associated to cashback, consumers have also a tendency to increase the amount of their basket.
Cashback is also a brilliant idea to increase retention. Indeed some retailers actually give some money back or credit it directly on your bank account. For those sites, in a consumer perspective, I think costumers have a feeling of owing the brand something and thus he will go and purchase on this site once more.
On the other hand, many e-commerce sites give this reward in the form of a voucher or coupons to use on their site. This is an easy way to increase retention as consumers are “forced” to purchase through the site again.
Additionally, it helps them build a loyalty program; therefore it might be a better way of engaging with consumers by creating this relationship. In this regard, one is an instant offer and the other one an “offer” creating a relationship between customers and the brand.
Thus, to summarize, cashback is a new marketing tool putting aside traditional discounts and that will soon take over e-commerce sites; it helps these sites boost sales in many ways.
It could be about increasing conversion, as the process itself is unique. Indeed, customers are attracted by these kinds of offers and used to make bigger baskets as well as proceed towards check out faster. In addition, it can also increase retention rates
On the one hand, if the site is offering cashback through vouchers to redeem on the site then, the consumer will have to make another purchase to benefit from the cashback offer. On the other hand, for the customers having their cashback credited to their bank account, their shopping experience might have been pleasant and therefore they will return for another purchase.
As for now, cashback also leads to more engagement with the customers and to a stronger relationship with the brand. Companies have made it clear that cashback could benefit them and their clients as well.
Cashback is growing fast in the e commerce world and there are some reasons for that. Every online shopping store should pay attention to this phenomenon, as it can help to boost their sales in many ways.