At a time when increasingly digitized retailers, restaurants and other businesses are investing heavily in their loyalty programs to acquire and retain customers, Portland, Oregon-based FinTech Bumped says its fractional stock awards program beats them all.
According to analysis derived from its two-year pilot program, the ability to “turn everyday spending into investing” has a profound impact on the stores and brands people choose.
As an example, Bumped said that “once customers were rewarded in fractional shares of stock for spending at Lowe’s, Bumped saw a $47.82 increase in monthly spending with the home improvement brand, along with an additional .84 visits per month.”
Not only did customers spend more and visit more when they became stakeholders, but the return on investment for Lowe’s was 69.5x, Bumped said, noting that 62 percent of customers changed their behavior after becoming owners.
But perhaps most rewarding of all is the fact that during the 24-month test period Lowe’s share of the home improvement wallet rose by 24 percent, “meaning that users began spending more with Lowe’s and less with their competitor as a result of ownership,” Bumped said.
“In industries dominated by duopolies, like the home Improvement category, it’s critical that brands look to build long-term, lasting relationships,” said David Nelsen, founder and CEO of Bumped. “I believe that the brands who bring their customers into the fold by making them owners will be able to win spend directly from competitors both near and long-term.”
The Ownership Economy
Although the pilot program rewarded fractional shares to over 13,000 U.S. consumers at more than 80 brands, the company’s app-investing system now links to over 1,000 publicly traded choices.
Categories include top listed companies in an array of choices ranging from computers and electronics, to department stores, clothing, shoes, hotels, travel, furniture, sporting goods and more.
By signing up for the free iOS or Android app and linking a debit or credit card to track purchases, consumers are then instructed to select up to four brands that will directly deposit shares into a connected brokerage account held by Bumped Financial whenever something is bought.
The actual reward rates vary depending on what company you choose, or if you’re buying in-store or online, but tend to be about 1 or 2 percent, although certain merchants run promo rewards offering as much as 5.5 percent.
The catch, if there is one, is that while Bumped accepts debit cards, you must have a transaction processed as credit — and not use your PIN.
“We believe everyone deserves to be an owner,” Bumped marketing material states, noting that only about half of Americans participate in the stock market. “For beginners and investing pros alike, fractional stock rewards can be an easy way to become an owner of the brands you love.”
Fluctuations
Of course any stock can go up or down in value, however, Bumped noted last month that the fluctuating stock market did not negatively impact the customer lifetime value for a few key sectors. In the gas category, for users shopping at Chevron, BP, ExxonMobil or Shell, Bumped saw an average lifetime value increase of 111 percent across those brands.
Club warehouse shoppers at Costco, BJ’s Wholesale and Sam’s Club saw an average lifetime value increase of 76 percent.
Of course when making any investment — even one that doesn’t cost you anything out of pocket — it’s always wise to remember the old Wall Street axiom: past performance is no guarantee of future results.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More