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3 Types of Reward Programs Every Retail Brand Should Know About

Entrepeneur 24 Nov 2021 05:30

Retailers must be three steps ahead in this fast-moving market.

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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”.

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