As far as incentives go, cash back on purchases would seem to be up there! But are money back rewards programs working? We asked shoppers!
Each fortnight, Power Retail surveys thousands of Aussie online shoppers to find out what they’re purchasing, how they’re purchasing it and what they want. Our last survey focused on cash back rewards programs, and the results may surprise.
Make a purchase, receive a percentage back of the cost. What’s not to love? Right? Well according to the results, not everything.
A massive 35% of online shoppers have used a money-back program to make an online purchase in the last six months. This means that just this year, over a third of online shoppers have used a money rewards program at least once. While this number in itself is pretty impressive, it’s the growth that is most notable. In September 2020, 26% of shoppers had made an online purchase using a cash back service, representing 34.6% growth.
So, who is benefitting from this increase in cash back purchases? Cashrewards and Shopback remain the two most popular offerings. Over half (57%) of respondents have used Cashrewards in the last six months, while almost half (49%) of survey respondents have used Shopback in the same period. The drop between second and third place is pretty big, with 17% of shoppers having used Honey in the last 6 months.
For retailers, does the increase in cash back uptake translate to an increase in sales? Cash back programs are changing how and where shoppers buy. For example, 52% of respondents say they spend more when using money rewards offerings. They are also more likely (72%) to buy their products on a site they haven’t purchased from before if there is a cash back offering.
What about the shoppers who aren’t using money-back services? The number one reason is still that they’re unaware that they even exist. At 41%, those who have no idea about cash back programs has decreased since September (when it was 53%). Though in terms of awareness, there is still a lot of room for improvement. While this figure has decreased, what has increased is those who don’t see the benefit (up to 14% from 10%) as has the perception that it takes too long to receive the money (up from 7% to 10%).
It will be interesting to see whether there is another shift here in the coming months. Shoppers are raising the bar higher and higher when it comes to user experience, and this extends not just to retailers themselves but to rewards programs too. Will money back rewards programs be able to take awareness and UX to the next level? Only time (and Power Retail!) will tell.
From Loyalty Programs, Cart Abandonment, Marketplaces and more, regular Power Retail Talking Points take a deep dive into exactly what consumers are looking for. Find out more about what shoppers want and how they’re spending. Up-to-date trends based on real-time data so retailers can make strategic decisions. Find out more: Power Retail Switched On.