Knowing the power of consumer insights and recognising the challenges many retailers are currently facing, Cashrewards partnered with Inside Retail to conduct an independent and nationally representative survey of 755 shoppers to better understand how consumers are dealing with the rising cost of living and how cashback programs are impacting their spending habits.
All over Australia, notch by notch, consumers are tightening their belts. The rising cost of living is forcing consumers to change their behaviour; they’re spending less and when they do, it’s more conscientiously.
But some retailers are fighting back. By taking a fresh approach with cost-effective strategies like cashback programs, they’re addressing the increasingly expensive elephant in the room, and not only engaging shoppers but seeing returns.
First of all...
How concerned are shoppers when it comes to cost of living?
Over the last 12 months, the cost of living has been steadily rising, but, unlike a souffle, no one is particularly happy about it, with many consumers feeling its impact. According to Inside Retail’s report, compared to a year ago, over two-thirds of consumers (69%) are now more concerned about whether they’ll be able to pay their bills.
For many, these concerns are so great, they’re influencing their spending habits, with four out of five shoppers saying that in response to the rising cost of living, the way they shop has changed, with:
- 80% now making a greater effort to find better deals
- 77% making the decision to cut back on non-essential spending
- And, just over half (55%), opting to save money by buying lower quality items.
Most shoppers employ multiple of these cost-saving strategies, which means simplistic measures are no longer enough to attract and retain shoppers. Retailers need to provide customers with ways to save money and build sustainable customer relationships so that they remain front of mind.
When properly configured and delivered, cashback programs can achieve both of these things, which leads us to our next question…
Exactly how popular are cashback programs?
While most retailers have likely heard of cashback, they may not be aware of just how popular cashback programs in the Australian market are.
Cashback programs are well established in the Australian retailer environment, with the Inside Retail report revealing that out of those surveyed, 2 out of every 3 shoppers under the age of 45 are using them.
In fact, cashback programs aren’t only popular, they also have the added benefit of inspiring loyalty for brands, with shoppers statistically less likely to ‘cherry-pick’ between cashback programs, than rewards programs, which tend to inspire point chasing. The study found that, while 53% of consumers are members of three or more rewards programs, only 11% of shoppers are members of three or more cashback programs.
Okay, but how often do these concerned and loyal shoppers actually use cashback?
The number of Aussie shoppers making use of cashback has only risen in the wake of the cost of living crisis, but what about as individuals? How often do they shop through cashback sites? Here’s what we found:
- Cashback is particularly appealing to frequent online shoppers. 48% of whom make four-plus cashback purchases a week.
- 1 in 3 cashback members are committed users and make at least one cashback purchase each week.
- While, for the vast majority of shoppers (74%), cashback is a regular part of their life, and they use it to make at least one purchase every month.
To summarise, Aussie shoppers are deeply concerned by the cost of living and, as a result, are turning to cashback programs. Retailers looking to engage with these consumers will need to address the elephant in the room, by building sustainable relationships with customers and providing them with ways to save money. They can achieve this by partnering with Cashrewards to, inspire both loyalty and regular shopping.
But this is just the tip of the information iceberg. If you’d like to learn more about how the cost of living is affecting consumer behaviour, how cashback is helping them, and how it can help you, check out the full report.
Sources - Inside Retail Survey 2023