Several studies show that rewards programs have been steadily growing in the country. A study by Panorama Mobile Time and Opinion Box, for example, reveals that 421% of consumers who shop through apps consider cashback the best feature.
“Digital platforms allow the creation of loyalty programs that offer truly efficient discount options, capable of giving businesses more visibility in a competitive environment,” says Sheila Moura, Retail Director at IZIO&Co, the most comprehensive solution for connecting all ends of the retail chain with the shopper. "This is the main way for retailers to engage diverse audiences, increase sales, and grow their customer base," he adds.
To reinforce the benefits of this method for the sector, the expert listed five advantages companies have gained by implementing cashback in their operations. Check it out:
- Customer retention
According to a survey conducted by IZIO&Co, which analyzed the purchasing behavior of more than 5 million consumers across 24 retail chains that already offer cashback as part of their sales strategy, customers who receive the benefit on their first purchase have a 4.8 times higher retention rate after six months compared to those who don't receive the benefit. The executive emphasizes that this is due to the "attribution of purchasing power to the shopper."
"People can use the discounts on new products and services almost immediately, or accumulate them to use on other occasions, as they see fit. Therefore, it's a format that creates a connection between retailers and the public in a completely transparent and flexible way," he explains.
She further emphasizes that the solution becomes even more important because customer loyalty is "no longer a differentiator, but rather an obligation." "Delighting consumers is a lever for ensuring Return on Investment (ROI) in promotional campaigns, and this is what companies must constantly strive for to increase their profitability," she adds.
- Improved sales quality
Another piece of data collected by the startup indicates that retailers using cashback can achieve a higher spend per shopper of R$851,000 compared to consumers who don't benefit from the benefit. This generates an additional revenue of R$1,000,000 per 1,000 engaged customers.
For Sheila, these results are linked to a 18% increase in the average ticket. "Unlike instant discounts, this format expands both the customer's range of options and the ability to purchase them at a better cost-benefit ratio. Consequently, sales become more robust," she states.
- Increased shopper frequency in the store
The IZIO&Co study also reveals that shoppers who receive cashback have a 57% higher frequency in the retailers surveyed. The Retail Director emphasizes that this rapid engagement is due to the elimination of any bureaucracy in the shopping journey.
"The consumer sees the discount reflected in their digital wallet, and this is what prompts them to make the quick decision to choose one chain over another. Essentially, the customer understands that this is a genuine benefit, which, in turn, increases trust in that retailer and ensures their return in the future," he highlights.
- Cost reduction
Despite being a discount, cashback doesn't affect the product's price on the shelves. This gives retailers greater predictability regarding the costs of this strategy, as it saves on labeling and even reduces human error.
"Technology ensures that cashback is an aggregating solution, not an urgent one. In other words, consumers can choose not to return to the store if they don't see any advantages in making a purchase at that time, but the benefit still becomes a 'result' for the establishment and doesn't harm business," Sheila points out.
- Adapting to the demands of both sides
Because it's a simpler and more efficient operational alternative, cashback also serves as a promotional lever that addresses the various variables of a business. As the Retail Director explains:
"Offering a personalized and relevant shopping experience so customers can access cashback also creates the need for them to be part of that company's loyalty program. In other words, the retailer can segment offers according to their goals, while the customer also has the freedom and autonomy to choose when and what amounts to use. This way, everyone achieves their goals," he concludes.
