The Comeback Kid: Cash-Back Offers Stir Renewed Interest for Consumers
When it comes to shopping, consumers have more power to influence retailers than ever before. However, fluctuating consumer behavior has made it a challenge for some retailers to predict what consumers will want week in and week out. In this new era of retail, consumers expect trouble-free, multichannel experiences; easy payment processes; quick savings; and hassle-free returns.
One way to grab pivoting consumer attention is through a variety of promotional vehicles. Cash-back offers have long been a way for retailers to motivate consumer purchase behavior, especially on big-ticket items. However, with this shift in shopping behavior to more digital mediums, consumer preference for traditional mail-in rebates has plummeted. It’s easy to see why consumers love to hate rebates: They either have to wait to get their money back, or they see no benefits from them because they neglect — intentionally or not — to follow through on redemption opportunities.
As online shopping, and mobile shopping in particular, accelerates, so does the desire to save wherever and however the customer deems easiest.
Cash-Back Offers Go Digital, Get Easier
Traditional rebate programs have been plagued with challenges for years, leaving consumers unhappy and unwilling to be moved by the opportunity to save. Issues with rebate forms, proof-of-purchase requirements and the delay in receiving payments have led to a rise in consumer demand for digital cash-back offers. Most consumers today just simply don’t have the patience to wait weeks, or even months, for a cash return on their purchased items.
According to a recent RetailMeNot survey conducted by Google Surveys, nearly 50 percent of consumers agree that cash-back offers can be challenging to redeem, and 37 percent are concerned with the time it takes for redemption. Making the switch to online cash-back offers allows retailers to offer a new type of easy savings for their customers. It also potentially motivates new customers to spend more with their brand, and even try new products that they may not have otherwise.
Imagine the frustration that poor user experience can breed with customers, especially once they’ve spent the time and effort to clip barcodes, save receipts and mail in purchase information in order to save a few bucks.
These savvy shoppers are more likely to buy into the promotion if the process is simplified online. In fact, 70 percent of consumers prefer to receive cash-back offer payments in a form other than a check. In addition, more than half of tech-minded millennial shoppers prefer direct deposit or digital wallet cash-back options, such as PayPal, once they've made a purchase.
Double Down on Savings to Drive More Purchases
When offered in digital formats, cash-back offers are likely to close a purchase and encourage shoppers to buy more. Almost 20 percent of shoppers surveyed said they made a purchase or spent more than planned because of a cash-back offer in the last 12 months. Furthermore, nearly half of the consumers surveyed indicated they would be more willing to make a purchase with the ability to combine a coupon with a cash-back offer.
At RetailMeNot, our data shows that by using minimum spend thresholds, cash-back offers encourage consumer purchases and promote higher spend. Our retail partners have seen average lifts in AOV of 46 percent, and in some cases as high as 200 percent for big-ticket items in categories like furniture and home and garden.
Your customers are already attuned to how to find the best deals and offers from the brands they love. It’s now up to retailers to answer this demand for more savings by offering a strategic, omnichannel approach to deals, meeting customers with the savings they want on the channels they frequent.
Keeping the customer first is the way to succeed in retail today. With the right partnerships, tech-forward savings tools and customer-first mentality, your brand can deliver to consumers in a way that others have failed to.
Marissa Tarleton is the chief marketing officer of RetailMeNot, an online savings destination connecting millions of consumers to the retailers, brands and restaurants they love — both online and in-store.