Macy’s, Kohl’s, 1800Flowers and Sephora are just a selection of retailers who are investing in cash-back shopping to boost online sales. The average year-over-year growth for retailers who participate in the cash-back program on Ebates.com is approximately 20%, according to Kevin Johnson, president and CEO. Prior to the recession, Johnson adds, year-over-year growth was consistently at approximately 50%.”When the economy recovers we expect to see this type of growth again.”
To date, more than 1,100 retailers have signed on with Ebates.com to reach more than eight million shoppers enrolled in the program.
To participate, retailers commit to share a portion of their sales commission with consumers. “It’s a win-win for the retailers and the consumers,” says Johnson. Retailers benefit from increased sales and consumers who sign up for a free membership receive cash back for all their purchases completed through Ebates.
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Since Ebates was founded in 1998, members have spent more than $1.3 billion at participating retailers and have received more than $40 million in rebates. The average basket size for Ebates members is more than $100, resulting in an average quarterly rebate check is $30, according to Johnson, “But we regularly send out checks for thousands of dollars” to shoppers who make larger purchases.
Cash-back awards vary depending on the product category, Johnson says. “Higher-margin products can give back as much as 26%; shoes and magazines average 10-12%; clothing and accessories are in the 6-8% range; and consumer electronics and travel may return 2-4%.”
Promotions boost sales
While retailers are only required to commit a voluntary percentage of their sales commission to join the Ebates program, they also can participate in paid promotions to bump up sales. Recently, 20 retailers who participated in an Ebates holiday promotion averaged 90% year-over-year growth. “These merchants are overjoyed with the results they’re achieving with Ebates,” says Johnson.
“While Q4 2008 was a disaster for most retailers, we saw 61% year-over-year growth” for all Ebates retailers, Johnson notes. Ebates retailers who participate in site promotions often achieve 100-150% year-over-year growth, he adds.
Strongest growth in appliances and department stores
Most recent Ebates statistics show that appliance retailers and department stores/mass merchandisers are experiencing the largest sales increases. Year-to-date, Appliance sales were up 209% and Department Stores increased 121%. Health and Beauty also is a strong category, up 64%, and Clothing increased 41%.
Johnson attributes much of Ebates’ success to quality customer service and a strong partnership with the merchants. The customer service team members are on staff in the Ebates executive office. “During peak seasons the whole staff pitches in and even I do customer service,” says Johnson.
“We really consider ourselves partners with our merchants,” Johnson continues. “We work with them to drive sales and bring lift to their stores during key seasons.” Retailers participating in the Ebates program often offer exclusive deals and special promotions to Ebates consumer members. “We have a really good relationship with our retailer partners and in exchange they provide exclusive deals to our members.”
The proof of Ebates’ success is in the numbers. “We added two million members last year,” says Johnson, and the company has experienced 28 consecutive months of year-over-year growth, despite the recession.
