As eCommerce marketplaces look to gain back share from industry giants, Wayfair joins those looking to in-house rewards programs to make its offerings more relevant to shoppers.
On a call with analysts Thursday (Feb. 22) discussing its fourth-quarter and full-year 2022 earnings results, the home goods online marketplace discussed its intention to use loyalty rewards outside of its branded credit cards.
Niraj Shah, the company’s CEO, co-founder and co-chairman, explained that Wayfair plans to launch a “tender-neutral” program in the fall.
“Today, what we have for a loyalty program, all the benefits of the loyalty program are associated with having the Wayfair credit card … that’s co-branded with Citibank or just the Wayfair-specific store-based credit card,” Shah said on the call. “…But we don’t have a broad-based loyalty program that works regardless of how you choose to pay, and we think that there’s a real opportunity for that.
Shah added that such a card would not only provide the ability for the marketplace to offer more perks and benefits, but also help keep it “top of mind” for consumers for “all things home.”
Credit card rewards, for their part, can go a long way. The PYMNTS Intelligence report “Leveraging Item-Level Receipt Data: How Personalized Card-Linked Offers Drive Store Card Usage” found that 41% of cardholders had used a card-linked offer program in the last 12 months. Yet, these kinds of offers are not as popular as brands and retailers’ loyalty programs. The same study revealed that 65% of cardholders shop with brands or merchants where they are members of loyalty or rewards programs.
Wayfair is not the only eCommerce merchant turning its focus to the loyalty-building opportunity that in-house, tender-neutral rewards programs offer. Etsy, for its part, shared on its earnings call Wednesday (Feb. 21) that it is looking to build such a program, attempting to drive relevance for customers.
“The goal is to get people to consider Etsy more often,” CEO Josh Silverman said. “People love Etsy. Talk to buyers, and they’re all going to say, ‘I love Etsy.’ ‘Why didn’t you shop on Etsy more often?’ ‘I didn’t think of it.’ So, committing to some form of loyalty program, we think can get them to prioritize Etsy.”
Consumers around the world want to be offered rewards programs. PYMNTS Intelligence’s study “2024 Global Digital Shopping Index: The Rise of the Click-and-Mortar™ Shopper and What It Means for Merchants,” commissioned by Visa Acceptance Solutions, drew from a survey of nearly 14,000 consumers across seven countries. It found that 72% want omnichannel rewards or loyalty programs.
Rewards programs are not the only way that eCommerce marketplaces are driving loyalty, though, and they are not necessarily the strategy that industry leaders are using. Amazon, for instance, keeps consumers coming back through its paid Prime subscription, offering faster shipping, more free shipping and other perks. Walmart, too, incentivizes more frequent online purchasing through its paid subscription, Walmart+, offering free grocery delivery, free shipping on small orders, and other benefits.
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