Digital Consumers Demand Digital Incentives From Retailers

As much as we’d all like to avoid it, there is simply no escaping inflation. 

Everywhere you turn, it seems the ravages and ramifications of rising costs and reduced buying power are either in your face, your search results or your shopping basket leaving most consumers and households with no choice but to reassess their purchasing habits and undergo some form of proverbial belt-tightening to make ends meet.

Amid this inescapable and omnipresent economic hardship, new PYMNTS research has shown the growing importance for retailers, who are on the front line of this fight, to double down on solutions to attract and retain increasingly budget-minded consumers by incentivizing them to come in and come back.

Retailers that might be unsure about the importance that rebates, loyalty and rewards play in the consumer decisioning process need only look at what their competitors are offering, per new findings in the latest edition of The Expanding Payments Choice Playbook, a PYMNTS and Onbe collaboration.

I’m Digital, You Should Be Too

In short, the study reveals that since 70% of consumers, particularly younger ones, prefer to shop and deal with businesses digitally, it only makes sense that those same customers would want retailers and merchants to interact with them in a similar fashion. 

Where 98% of consumers are more likely to purchase a product after receiving a coupon to try it for free, the report says, similar numbers of consumers will pass up a discount and product all together if it requires them to pursue a mail-in rebate. 

Not only are digital incentives more effective, but they are also seeing increased use, demand and effectiveness, as the report also found when used as part of a collective approach, they can improve the customer experience and conversion rates.

“While traditional discounts encourage new customers to try our brand, the experience of earning and redeeming rewards goes far beyond the monetary value they receive,” Neal Cotter, director of customer advocacy and insights at women’s plus-sized retailer Torrid (CURV) told PYMNTS.

“Our loyalty program today focuses on forming stronger, more meaningful connections with our customers, incentivizing them to engage in the brand and keep coming back.”

An Omnichannel LTV Play

Using Torrid’s experience as an example, the Los Angeles-based operator of 600 stores and a digital storefront pointed to its latest results as proof that its approach to rebates and incentives was working, noting that its loyalty program had grown to 3.5 million members and was being used by 95% of its customers — and that was before the most recent super-spike in inflation took place.

Unsurprisingly, Cotter said, the brand continues to introduce and test new features to improve its program of customer incentivization to make it even more personalized, while acknowledging that any such plan is only effective if customers are also pleased with how the perks and benefits are distributed, which more times than not, means connecting with customers online.

“We’re looking for an omnichannel experience across eCommerce, mobile and our stores: offering multiple payment options; rolling out our buy online, pickup in-store services; and launching a mobile app that allows customers to conveniently manage their rewards and payment options all in one place,” Cotter said, while holding up results that showed more frequent engagement, larger purchases and higher overall long-term value of its an increasingly digital and budget-minded customer.