Inflation Is Causing Consumers to Hunt for Deals & Shopping Incentives. Here Is How Brands Should React
A study by Wildfire showed that inflation is driving 90% of consumers to seek discounts and cashback rewards when shopping online.
Consumers are looking for money-saving strategies like cashback incentives, discounts, and online coupons as a result of the current unstable economy and growing prices.
Shopping rewards systems are becoming widely used due to economic pressures, “crossing the gulf” from early adopters and coupon clippers to mainstream consumers who are looking for any opportunity to save money.
In a survey commissioned by Wildfire and done by the research firm Big Village, we looked at how mainstream consumers felt about rewards and other shopping incentives and what they expected from them. Due to price increases, the results showed that 90% of respondents are more interested than ever in receiving discounts, using coupons, and earning cashback benefits when buying online.
Discounts and rewards have an impact on online shopping behavior.
Consumers will continue to shop no matter the economic climate. However, amid hard times, they will alter their purchase patterns, such as choosing store brands over more expensive options. Recent reports on these kinds of behavioral changes include those from Personetics and Gartner. Personetics found that nearly two out of three consumers are reducing their spending on non-essentials as a result of rising living expenses, and Gartner found that nearly one out of four consumers will spend less on holiday shopping this year as a result of rising costs.
Rewards and other incentives play a significant role in influencing consumers’ online shopping behavior in this situation. The top of the sales funnel (awareness and contemplation) and the bottom of the purchase funnel are both immediately and positively impacted by the availability of rewards and incentives (completing a purchase).
The Wildfire survey’s major finding indicates that incentives have an effect on consumers’ behavior even before they choose where to shop: The availability of rewards, according to 81% of respondents, influences their choice of e-retailer.
Rewards and incentives have an even greater impact on consumers’ purchasing decisions than where they buy, leading to better sales conversion rates. According to research, most respondents are more likely to finish a transaction when they can benefit from cashback benefits, utilize a voucher, or receive a discount.
Online shoppers frequently look for savings, and as the economy becomes tighter, we predict that this tendency will become even more. In order to save money on their purchases, the majority of respondents (61%) said they “always” or “often” look for coupons, discounts, cashback offers, or other savings opportunities.
The conclusions drawn from these studies are obvious for every firm that sells products online:
Retailers may win the preference war by rewarding customers for their purchases, whether through local loyalty programs or online cashback rewards schemes.
Through loyalty and rewards programs, offering discounts benefits merchants by increasing sales conversion.
Businesses who decide against providing these incentives are at a disadvantage when customers choose where to shop online.
Related Article: How Consumers Can Choose Better Brands With the Help of Trust and Incentives
according to the simplicity desires of the customer
Additionally, customers expect convenience and want to readily access rewards and discounts while maintaining the natural flow of their online buying activity without interruptions or obstacles. The majority of shoppers polled for the Wildfire report chose rewards that are automatically applied at checkout or that may be activated while making purchases. On the other hand, fewer customers prefer to search through a list of offers than to receive an email with a particular offer.
The general consensus among consumers is that a rewards program or discount offer should be as easy and straightforward as possible. Consumers favor cashback benefits over rewards like points, miles, or future discounts because they are straightforward to comprehend and easy to get. Additionally, the survey found that cashback is preferred by 80% of respondents as a reward over points or credits that may be used for future purchases.
Other study supports the requirement for simplicity and convenience in incentive systems. Retail marketers were asked to identify the components of a loyalty program that they believe are most important in the Comarch and Forrester report, 2022 Loyalty Marketing & Rewards Program. The findings indicated that most people are inclined to give cash prizes.
What does this mean for firms thinking about implementing a loyalty program? Online shoppers are now very knowledgeable. Their expectations for earning and redeeming rewards through retail loyalty programs or other shopping rewards programs have shifted as a result of their increased comfort with seamless digital experiences. Retailers will find poor uptake for their program unless it is easy and straightforward for customers to earn and redeem rewards. Consumers are no longer ready to settle for jumping through hoops.
Conclusion
Online retailers may satisfy the needs of today’s value-conscious customers by providing simple-to-access purchase incentives, such cashback and coupons. Through these programs, they can not only influence consumers’ purchasing decisions favorably but also provide consumers’ wallets some much-needed respite.
