Each and every one of us — no matter the income bracket — is aware of just how much prices at the pump, in the aisle and online have risen.
And the sticker shock may be high enough to keep us from closing the deal and spending the money to get the goods or services being considered at that moment.
Merchants have a small window, then, to incentivize consumers to pull the trigger.
Psychologically speaking, faced with soaring prices, consumers may be inclined to spend money if they feel that higher costs are offset, at least a bit, by something “given back” by the merchant or enterprise with which they are interacting.
Rebates, then — and more specifically, in the digital age, rewards and loyalty offered in context, in the moment of indecision — can give consumers the feeling that things are not as dear (that is, expensive) as had been previously thought.
In the latest “Expanding Payments Choice Playbook,” PYMNTS, in collaboration with Onbe, found that coupons for free products make customers 98% more likely to buy, with sweepstakes increasing the likelihood by 39% and contests by 42.5%.
Smartphones in the Aisles
But context matters. In a separate PYMNTS report, “The 2022 Global Digital Shopping Playbook,” PYMNTS has found that 24% more brick-and-mortar shoppers in the U.S. used their smartphones for shopping in stores in 2021 than in 2020, using them chiefly to earn rewards.
Read more: New Study Shows Digital Pickup And Delivery Features No Longer Optional For US Merchants
That’s a telling statistic, given the fact that as economies reopen, and as stores go back to bringing foot traffic in the aisles, consumers are bringing technology with them (the devices) as they return to physical points of sale. The mobile device, then, becomes the key place to present those same consumers with the contextual reward that may lead them to transact (if they are hesitant), or set them up for the next purchase with that retailer.
Prodding the consumer in real time may be a useful strategy, given the fact that the most recently-released data from The Commerce Department show that retail spending continues to moderate. Per the Thursday (April 14) release, overall March sales rose by 50 basis points, compared to the previous month. Spending, or at least spending growth, may become ever-more-muted in the face of paycheck to paycheck pressures. More of our take-home pay is going toward basic expenses like rent and gas, and discretionary purchases may wind up being pushed out.
In one example of how technology can strengthen the ties between consumers and merchants, David Metz, CEO at AdTech firm Prizeout, told PYMNTS’ Karen Webster that adding value — monetary value, that is, at key points of engagement, and through gift cards delivered digitally — can boost engagement at checkout. In Prizeout’s model, the company extends more than two dozen gift card options to the consumer as merchants engage in a real-time auction to bid for their targeted demographic.
Read also: AdTech Platform Lets Merchants Tempt Consumers To Turn Payouts Into Rounded-Up Gift Cards
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More