Cashback programs are more effective than reward points in shaping certain shopping behaviours, according to new research conducted by cashback platform Cashrewards in partnership with Inside Retail.
Figures from the study show that more than three in five consumers feel that cashbacks are more persuasive than rewards points in encouraging them to spend, from making impulse purchases to trying out new products and opting for higher-quality items. The report, entitled A dollar saved is a dollar earned, shows cashback is more successful than reward points in prompting impulse, trial and upgrades, with 56 per cent of consumers believing cashback is better value than reward points as a whole.
According to Cashrewards’ chief marketing officer Nicole Bardsley, the report was prepared in response to an evident lack of data on cashback being generally available to brands and retailers.
“This report provides our brand partners with insights into consumer spending trends in this economic climate,” said Bardsley, “and why cashback appeals to consumers and, therefore, brands too. Despite prominent media attention to the cost of living crisis, we know spending is still strong in some categories and we wanted to understand what consumers are still prepared to purchase and what is driving their choice of one brand over another in this climate”
Rising costs have made cashback offers especially appealing to Australians under the age of 45, the demographic also hardest hit by pricing increases. Two-thirds of these shoppers say cashback has encouraged them to buy better quality items to help offset the trend of “trading down” as prices get more expensive.
“What we know from the research is that more than two-thirds of consumers are more concerned about being able to pay their bills than they were 12 months ago,” explains Bardsley. “Three-quarters are cutting back on non-essential spending and four in five are making a greater effort to get better deals. So in this environment, Cashrewards is helping make every dollar go further not only for our members but also our brand partners by ensuring that there’s no wastage on their marketing spend – meaning brands only pay when a customer pays.”
The report demonstrates how engaging with special offers plays a crucial role in establishing lasting brand loyalty. Among cashback program members, 41 per cent frequently take advantage of special offers, a number that jumps to 56 per cent amongst frequent online shoppers. This behaviour carries significant weight for retailers dealing with products of lower purchase frequency by not only accelerating planned purchases but also encouraging buyers to spend higher amounts whilst shopping.
Cashrewards’ own brand partners have seen considerable success in their cashback promotions, including FMCG and F&B partners selling lower-cost items. Restaurant franchise Pizza Hut, a four-year Cashrewards partner, recently recorded exceptional results from its “Savvy Saturdays” cashback program – which offered deals of up to 100 per cent cashback capped at $10 on pizza orders. Designed to help buck the trend for sales to slow in February and March, the promotion resulted in some of Pizza Hut’s biggest-ever cashback sales days by breaking records each Saturday over the two-month promotional period – along with a significant number of increased return customers to the brand.
“We partner with more than 2000 brands, and have recently passed 2 million members,” says Bardsley. “Our members receive up to 20 per cent cashback regularly from some very big-name brands such as Myer, Booking.com, Apple, BWS, Adore Beauty and Lancome. Those brands pay us for the customers and the sales that we drive to them, and we pass most of that commission back to our members in the form of cashback.”
The Australian-owned-and-operated business has also established a two-year-long partnership with ANZ bank, putting Cashrewards in a unique position to put their brand partners before millions of ANZ customers as well as their own – helping their businesses scale, increase brand presence and drive direct sales opportunities to those brands. The company also devotes a percentage of redeemed cashback to the Children’s Starlight Foundation, which has benefitted more than 45,000 children and their families through $1.7 million in donations.
“Over the past two years, we’ve seen significant growth in the cashback industry,” says Bardsley, “and our member base has grown 54 per cent over the last year. So we are seeing that cashback is increasing in popularity, particularly in this economic environment. It’s a great opportunity for our partners to create better ROI for their brands through the use of cashback.”
For more information about Cashrewards, visit A Dollar Saved is a Dollar Earned.
