3 Types of Reward Programs Every Retail Brand Should Know About

Asia's Tech News Daily

The economy is in a period of incredible growth, due in large part to consumers doing what they do best… consume. Ecommerce, in particular, has seen rapid expansion, especially in the past 19 months. According to data from IBM’s U.S. Retail Index, in 2020 the pandemic accelerated the shift from in-person shopping to ecommerce by five years. In the U.S., ecommerce sales grew 31% in 2020 versus the previous year’s figures, and another 22% during the first half of 2021 — breaking sales records every month.

As spending increases, consumers increasingly expect cashback and discounts

Concurrent with these dynamics, consumers increasingly seek, and expect, rewards and discounts as part of online shopping experiences. Cashback programs and discounts are no longer the realm of coupon-clippers: they have gone mainstream, thanks in part to the emergence and success of services like Rakuten, Honey and Capital One Shopping. An August, 2021 survey of 5,000 banking customers conducted by American Banker and Monigle found that “rewards and loyalty remain paramount to the customer experience”.

Why rewards and discounts are emerging as the most efficient marketing strategies for retailers

As online advertising becomes more expensive (and often less effective), merchants are looking for the best way to deploy marketing budgets to acquire and retain customers. Retailers are finding that pay-for-performance channels deliver an increasingly attractive return on advertising spend (ROAS), and are heavying up budgets for cashback, coupon and loyalty platforms built upon a pre-existing affiliate marketing infrastructure. These rewards-focused marketing channels drive key revenue metrics for retailers, including increased sales conversion rate, reduced cart abandonment rates and higher average order value. Plus, they offer merchants the ability to only pay when a sale is actually made.

Consumer services, too, from telecoms to financial institutions, are increasingly offering rewards programs to benefit (and retain) customers by rewarding them for shopping. There are several approaches to this, some more effective than others, so what is the best way for a consumer service to implement shopping rewards? Let’s look at the three main categories of reward/loyalty platforms.

1. Card-linked offers

Born out of the need to provide attribution from online advertising to offline transactions, a card-linked offer is tied to a specific payment card, and earns the consumer cash back or discounts at select merchants, so long as the consumer activates the reward in advance and uses the specified card. You’ve probably seen how these work in your own credit card activities. You log in to your account, see a list of offers, activate them, then make the purchase at that merchant to effectively “redeem” your offer. 

Card-linked offers do a nice job of earning rewards from local and/or off-line businesses; however, they are a mismatch for ecommerce, because they don’t map to consumers’ natural shopping behavior. Rather, as noted above, the customer has to take a detour from their natural online shopping flow to activate offers in advance of shopping, with multiple steps required before they’re able to receive the benefit. It isn’t a great customer experience, either, because the process makes the cardholder jump through hoops.

Still, card-linked offers can be good for the small number of customers who do seek them out and use them. And with their detailed transaction history, card issuers are able to target these programs to the right customers. A case could also be made that retailers garner incremental new customers from them, if the person who activates and redeems an offer by purchasing at that merchant was not already a customer there. But in the end, because of the multi-step detour required to redeem, card-linked offers aren’t the best solution for the majority of customers.

2. Shopping portals

Another common tactic is to offer cashback and discounts via a “shopping portal” (a.k.a. “offer wall”). In this model, the program creates a separate section behind the customer’s account login, where a range of offers and cashback benefits are aggregated. The customer can then choose to shop directly from the merchant links on this page — in fact, the customer must click from the shopping portal link in order to receive the cashback offer. This click creates the connection, so that the merchant is able to attribute the resulting sale. This way, the merchant can issue the affiliate commission for that sale to the bank, which in turn passes on part or all of the commission to the customer as cashback.

It’s convenient for the customer to be able to see all the offers in one place, but this too is a less than ideal shopper experience. Customers must remember three steps in order to initiate receiving cashback on their ecommerce purchase: log in to their account, visit the portal, and click on the desired merchant — a sequence that’s well outside a typical online shopping journey. How often do you think to check your bank or mobile carrier’s offer directory before you buy a new pair of running shoes (or anything else for that matter)? Many companies offering these shopping portals see less than 2% of customers taking such a detour: most go directly to the brand’s site.

Shopping portals do have the advantage of displaying offers in a single convenient place, and some companies are attracted to offer walls because it presents their brands (with associated deals) to an audience that has high purchase intent. But ultimately, they’re not the best solution for the customer, since the required detour is outside of their usual behavior and, frankly, difficult to remember.

3. Shopping companions

A third reward program flavor is a real-time shopping companion. As the description implies, these are tools which stay with the shopper in the course of their normal, everyday online purchasing behavior. These often take the form of browser plugins/extensions which meet the customer where they are, without taking them out of typical online shopping flow. Whether on mobile or desktop, these tools display available offers (e.g. coupons and cashback opportunities) in real-time as the customer is visiting a given brand’s website. 

With these real-time shopping companions, there is no need for a shift in the customer’s behavior before they can realize a cashback or reward benefit. They don’t have to add an offer to their card or visit a specific page before they can be rewarded. They just shop and buy normally. In essence a shopping companion such as a browser extension offers a personalized experience by default, because it shows relevant offer information for the exact websites an individual user is visiting. Notably, most such companions now exist mainly on desktop; there are few mobile options available. 

For providers of rewards programs, these tools increase loyalty and add value. For retailers, participating in them can increase brand affinity for those who are organically shopping, with incremental revenue driven by increased conversion rates and higher order values.

Brands must respect modern consumer behavior and plan for customer experience

The upshot? The three platform types noted above are not mutually exclusive; companies that use a well-rounded and multi-pronged approach — with special emphasis on customer experience — are more likely to succeed. It’s now clear that brands can no longer expect customers to take extra and unnatural maneuvers while shopping online. Their experience should be paramount in order to ensure repeat sales, and take precedence when planning customer acquisition campaigns. Companies that take the opportunity to meet customers where they are and complement their existing behavior with next-generation shopping and rewards programs will find themselves in the retail market pole position.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related


How to Set Goals That Support Each Department and Your Entire Organization

Setting goals in your business is a must if you want to go anywhere. With clear objectives, people can align together and have a real direction for all of the ... Read more »

Why Black Entrepreneurs Should Consider Therapy

It’s easy to get caught up in the hustle and bustle of life and work and lose sight of one’s mental health, especially being a Black entrepreneur in the current climate. ... Read more »

2022 Workplace Trends and Why Employee Experience Matters

This year showed a ray of hope to businesses and professionals suffering from the Covid crisis. Organizations started to get back on track, and employees could work on-site again. It was the ... Read more »

Learn the Best Ways to Grow a Podcast in 2022

Humans are curious creatures and we’re always changing the ways we learn and engage with the world around us. Over the past few years, podcasts have become an incredibly effective ... Read more »

5 Reasons Why You Should Create an Emergency Response Program for Your Business

When most people think about running a business, what comes to mind is managing the day-to-day administrative and operational tasks of providing products or services to customers. While it’s true ... Read more »

Start an Amazon FBA Side Hustle Today

The internet has made collaboration and communication easier than ever. But it’s also made it easier to make extra money. So much so, that more than one-third of Americans today ... Read more »

Most of What You Know About Business Purpose Is Wrong

Your company’s purpose is the valuable reason it exists. Purpose-driven businesses focus on that purpose and align everything else around it — including how and why they make money.  Unfortunately, ... Read more »

5 Penny Stocks To Buy For Under $5 Right Now

Are These Penny Stocks On Your December Watch List? If you’re making a penny stocks watch list, you’re not alone. Right now, there are hundreds of penny stocks to choose ... Read more »

These Were the Ten Worst Performing Stocks of November 2021

November has historically been a strong month for the stock markets. This year, however, the concern over the new COVID-19 variant pulled back the rally a bit towards the end ... Read more »

Marvell Technology (NASDAQ:MRVL) a Buy After its Marvelous Q3

Marvell Crushes Q3 Earnings and Has the Makings of a Semi Leader A big part of the allure of investing in semiconductor companies such as Marvell Technology (NASDAQ: MRVL) is ... Read more »

Siderurgica Nacional (SID) Dips More Than Broader Markets: What You Should Know

Siderurgica Nacional (SID) closed the most recent trading day at $4.08, moving -0.97% from the previous trading session. This change lagged the S&P 500’s 0.85% loss on the day. Meanwhile, ... Read more »

Learn Technical Analysis Skills to Master the Stock Market

When you’re building a business, you’re likely pumping a lot of your personal wealth into your company. That’s why it’s important to find ways to continue to grow your wealth ... Read more »

Comcast (CMCSA) Gains As Market Dips: What You Should Know

In the latest trading session, Comcast (CMCSA) closed at $51.78, marking a +0.54% move from the previous day. This move outpaced the S&P 500’s daily loss of 0.85%. At the ... Read more »

Canon (CAJ) Gains As Market Dips: What You Should Know

In the latest trading session, Canon (CAJ) closed at $22.46, marking a +1.26% move from the previous day. The stock outpaced the S&P 500’s daily loss of 0.85%. Elsewhere, the ... Read more »

Crown Castle (CCI) Stock Moves -0.42%: What You Should Know

Crown Castle (CCI) closed the most recent trading day at $184.86, moving -0.42% from the previous trading session. This move was narrower than the S&P 500’s daily loss of 0.85%. ... Read more »

Juniper Networks (JNPR) Gains As Market Dips: What You Should Know

Juniper Networks (JNPR) closed at $31.27 in the latest trading session, marking a +0.19% move from the prior day. This change outpaced the S&P 500’s 0.85% loss on the day. ... Read more »

5 Defensive ETF Bets as Omicron Enters the United States

The highly mutated new COVID-19 variant, omicron, has finally entered the United States. Dr. Anthony Fauci has confirmed that the first case has been detected in California in a traveler ... Read more »

Raytheon Technologies (RTX) Stock Moves -0.67%: What You Should Know

Raytheon Technologies (RTX) closed at $81.11 in the latest trading session, marking a -0.67% move from the prior day. This move was narrower than the S&P 500’s daily loss of ... Read more »

Western Digital (WDC) Gains As Market Dips: What You Should Know

Western Digital (WDC) closed the most recent trading day at $57.52, moving +1% from the previous trading session. This change outpaced the S&P 500’s 0.85% loss on the day. Elsewhere, ... Read more »

Methanex (MEOH) Dips More Than Broader Markets: What You Should Know

Methanex (MEOH) closed at $39.78 in the latest trading session, marking a -1.07% move from the prior day. This move lagged the S&P 500’s daily loss of 0.85%. At the ... Read more »

ServiceNow (NOW) Dips More Than Broader Markets: What You Should Know

ServiceNow (NOW) closed the most recent trading day at $613.11, moving -1.65% from the previous trading session. This change lagged the S&P 500’s 0.85% loss on the day. Elsewhere, the ... Read more »

V.F. (VFC) Gains As Market Dips: What You Should Know

V.F. (VFC) closed the most recent trading day at $74.51, moving +0.59% from the previous trading session. This change outpaced the S&P 500’s 0.85% loss on the day. Meanwhile, the ... Read more »

Buy These Strong Tech Stocks Now at Big Discounts Amid Omicron Selloff?

Selling returned to the market in a big way Friday, prolonging a wild up-and-down stretch that began on Black Friday. Constant headlines and current uncertainty surrounding the Omicron variant, alongside ... Read more »

Levi Strauss (LEVI) Stock Moves -0.71%: What You Should Know

Levi Strauss (LEVI) closed the most recent trading day at $25.20, moving -0.71% from the previous trading session. This move was narrower than the S&P 500’s daily loss of 0.85%. ... Read more »

5 Reasons Why Your Corporate Blog Has Hit a Wall

Corporate blog content creation is a top priority of more than 50% of marketers. And with so many benefits — including the ability to reach, engage and convert prospects — you ... Read more »

5 Tips for Building a Remote-First Business

Almost 42% of U.S. companies were remote throughout 2020 and the number of out-of-the-office workers is set to double within the next five years. Read more »

Clara, the idea that was born from a roasted carnita and became the fastest growing Latin startup

Many of the world’s greatest ideas have emerged from casual conversations between friends. A few years ago Gerry Giacomán attended a roast carnita in his native Monterrey where he met ... Read more »

How Leaders Can Beat the Labor Crisis

By now, we’re all intimately familiar with the ongoing labor crisis, either because of the constant media coverage or because you or your company is feeling the effects first-hand. No ... Read more »

How This Maya Angelou Quote Can Fuel Your Ethos at Work and Beyond

I love Maya Angelou and her work, and these words of hers have become the way I live my life: “I’ve learned that people will forget what you said, people ... Read more »

Why Mental Health is Central to Your Business Continuity Plan

Covid-19 has shown us many things — most importantly, that large-scale, unexpected business disruptions can happen anytime, anywhere. How we prepare for these disruptions sets the course for how businesses ... Read more »

3 Ways to Eliminate Data Biases at Your Company

AI and machine learning are becoming synonymous with business success. Everywhere you look, companies are utilizing data to reach new heights. In spite of its benefits, though, utilizing data analysis ... Read more »

You Need to Make an Important Distinction for Your Small Business

Ultimately, the best customer service any business can offer is to be accommodating. The best customer service is often the result of observing how society is changing and adapting to ... Read more »

How to Build a Self-Publishing Side Hustle on Amazon

When you get to a certain point in your entrepreneurial career, you can start to pivot toward thought leadership. A thought leader is someone who is seen as an expert in ... Read more »

Increased Demand for Immigration to the United States

During times of turmoil, there is a greater urge for people to self-reflect and evaluate their life choices. The lockdowns of the pandemic forced people to spend more time at ... Read more »

7 Instagram Reels Ideas to Better Connect With Your Audience

Launched in August 2020, Instagram Reels has been getting a lot of attention from creators. As a competitor to TikTok, it provides the opportunity to create short and sweet videos ... Read more »

Here is Why Growth Investors Should Buy Focus Financial Partners Inc. (FOCS) Now

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market’s attention and deliver solid returns. But finding a growth stock ... Read more »

Burger King Is Selling Iconic Menu Item for Less Than a Dollar

Those with December birthdays may have to share the spotlight this year with one very favorite sandwich. picture alliance | Getty Images Burger King’s beloved Whopper turns 64 years old ... Read more »

FTI Consulting (FCN) Announces Name of New Senior MD in France

FTI Consulting, Inc.FCN announced the appointment of Karl Payeur as a senior managing director and head of its Forensic and Litigation Consulting and Technology segments in France. – Zacks In ... Read more »

How to Set Expectations and Get the Performance You Want From Your Team

There is one challenge I see rising and experienced entrepreneurs alike consistently face, and that is how to get underachieving employees to perform better to avoid going through the difficult ... Read more »

Blueprint Medicines' (BPMC) Ayvakit Aids Growth Amid Rivalry

Blueprint Medicines Corporation’s BPMC lead drug, Ayvakit (avapritinib), was approved by the FDA for the treatment of adult patients with unresectable or metastatic gastrointestinal stromal tumors (“GIST”), harboring a PDGFRA ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic