Online rewards come to stores
Kimberly Chin, Axios – September 2022: Engage People, a loyalty program technology provider, aims to let shoppers convert reward points into dollars when paying at the register.
Why it matters: As consumers manage rising inflation and energy prices, solutions to alleviate those wallet pressures will become all the more welcome.
Yes, and: U.S. customers are already sitting on some $100 billion of unredeemed loyalty points, according to marketing firm Bond Brand Loyalty.
What they’re saying: Opening another payment channel allows loyalty program sponsors to maximize the value of reward points, which will drive more consumer engagement, Engage People CEO Jonathan Silver tells Kimberly.
- This allows sponsors to build up this value proposition that with these points, “if you can maximize the return for me, I get a better benefit.”
How it works: Creating a smooth checkout experience requires a sophisticated tech stack, FreedomPay president Chris Kronenthal says.
- Providers must ensure data security, data compliance, speed of service and operational scale.
- Then they can account for the earning and redeeming of a bank’s points at a certain retailer, which Engage People already laid the groundwork for.
Meanwhile, the partnership allows Engage People to tap a wider roster of retailers.
By the numbers: Around 70% of Engage People’s participants have used “pay with points” more than once in a six-month period, Silver says.
- Engage People has also seen a 30% increase in basket size and a 35% increase in utilization at participating retailers, he says.
State of play: “As consumer spending becomes more precious, retailers will have to react to that and fight harder for a consumer,” says Kronenthal.
- One way to entice shoppers is via loyalty programs.
- Consumers’ readiness to go beyond traditional forms of payment — as we’ve seen with buy now, pay later and installments — will prime people for new ways to pay like with points, too, Kronenthal adds.