When cashback and offers were newly introduced in the e-commerce space, they were primarily used as strong tools of customer acquisition to attract first-time buyers to a website. Today, they have become inevitable for customer retention, where almost every buyer scouts for a deal before completing the transaction.
Offers and cashback are a habit for the buyer and a necessity for the business because they are viewed as effective instruments of affordability. Buyers have almost become accustomed to receiving some form of offer on their purchase.
For an online brand, it is not a sustainable model to consistently cut their prices. This is where banks and online payment platforms play a significant role in helping businesses extend cashback and offers almost consistently.
This article explains how these deals help businesses make shopping easier and more convenient for their customers.
How do offers and cashback work?
Cashback is an affordability tool where customers earn back a certain amount (a predetermined number or a percentage of the purchase value) while shopping online. They are usually offered by credit/debit cards, mobile wallets and other payment platforms. The money can be used for the subsequent purchase ensuring that the buyer’s next buy is for a lesser value.
Offers on the other hand are immediate discounts resulting in a decrease in the product’s value. They may require the user to enter a coupon code in order to avail a discount on the website.
In both the cases the buyer eventually saves money and perceives the purchase to be affordable.
| According to Statista, the global cashback industry is expected to be worth more than $200 billion by 2024, with statistics showing that 46% of cashback participants consider it a vital step in their purchase decisions. Retailers who have participated in cashback grew their revenue up to two and a half times faster than competitors who do not use them. |
What makes cashback and offers popular for users?
- They incentivise users to opt for goods that may have earlier seemed costly
- There are very few terms and conditions involved making the process seamless
- The cashback earned does not usually expire and can be used anytime
- The offers are instantly applicable
- Cashbacks/offers are prominent and almost always present on the checkout page motivating users to opt for them each time
How do cashback and offers ensure affordability in e-commerce?
Cashbacks and offers are all about offering more for less. Here’s a look at how they facilitate affordability for businesses.
- Businesses that offer cashback see a rise in the frequency of transactions among new as well as existing buyers who are assured of savings on their upcoming purchases.
- They influence the consumer’s buying behaviour making them opt for products that are priced higher
- Offers are instantly accessible to every user who has a bank account or a mobile wallet and without the need for any additional details.
- While consumers enjoy lower prices, businesses are able to ascertain that the buyers do not abandon their carts due to the lack of affordability options during checkout.
- When businesses partner with mobile wallet platforms and banks, they extend affordability to the buyer without really decreasing or discounting the product value
| Additional benefits for businesses that offer cashbacks and deals |
| Higher brand recall value since the user is rewarded |
| An opportunity to gain traction, especially for new businesses |
| Competitive advantage due to price optimisation |
| Positive influence on the customer lifetime value because of the extended consumption cycle |
| Higher chances of customer loyalty |
How does Paytm offer affordability through cashbacks and offers?
Paytm helps your consumers avail instant cashbacks when initiating a transaction through Paytm on your website. The offers include promo codes, coupons and deals from multiple banks that make the user’s checkout experience affordable as well as engaging.
There are frequent campaigns by Paytm as well that offer assured cashback which can be availed while transacting on an e-commerce store. Users usually receive a scratchcard which reveals the cashback amount.
Here’s a look at some of its other benefits for businesses:
- All configured bank offers are shown to your customers at one place on the website/app
- Users can access all applicable bank offers on all the saved payment methods on Paytm
- Transactions on the online store see a considerable increase
- It helps you attract more prepaid orders to your online store
- Your business is able to build customer loyalty and gain more regular customers
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