March 22, 2012 source: Billeo
Recently, one of our portfolio companies Billeo, Inc. released data on current online shopping trends from its network of over 100,000 online shoppers. The findings suggest that the rewards offered by a loyalty program can have a large impact on online shopping behavior. One statistic I found to be intriguing is that shoppers are almost five times more likely to use a reward offering the ability to earn miles or points rather than one that doesn't, such as free shipping. Murali Subbarao, our CEO at Billeo, believes that the ever increasing cost of airfare is the primary motivator. To learn more about the data, read the press release below.
Billeo, Inc., provides banks, credit card companies, credit unions, airlines and loyalty providers, with context-aware shopping and bill pay technologies that help them better interact with their customers online. I am proud to be a board member of this emerging leader in ecommerce.
Loyalty Miles Go a Long Way with Online Shoppers
Billeo Data Reveals What Rewards Offers Consumers Find the Most Appealing
Santa Clara, CA – March 22, 2012 — Loyalty and rewards programs vying for the attention of online shoppers should be focusing on miles and cut back on offers like free shipping when developing programs. These are among the results of a new analysis of online shopping behavior conducted by Billeo, Inc., creator of apps that help consumers save time and money while shopping or paying bills online.
“Miles, free shipping or points – the options for online shoppers are many. And still, the majority of these offers go unused,” said Murali Subbarao CEO of Billeo, Inc. “Online shopping presents a huge opportunity for brands and merchants looking to increase customer loyalty and financial institutions that need to drive card use. The marketing professionals who run loyalty programs just need better insight into what shoppers prefer.”
The data, released by Billeo today, indicates that the rewards being offered by a loyalty program have a direct impact on where the person shops, what brand they chose and what card they use to make a purchase. According to the online shoppers in Billeo's network, people prefer miles to any other rewards offer they were presented with during the past year.
“Our analysis shows that online shoppers are almost six times more likely to use an offer that includes miles, compared to one that does not,” continued Subbarao. “The rising cost of airfare has turned earning miles into a significant motivator for consumers who are shopping online.”
Other findings from Billeo's analysis include:
Online Shoppers Prefer Rewards Points and Miles Offers
- Online shoppers are almost five times more likely to use a rewards offer that includes the ability to earn miles or points than one that doesn't
- Offers that allow online shoppers to earn rewards points or miles are more appealing — these offers average a 14.5 percent click-to conversion rate
- Offers that do not include points or miles, like free shipping, are less appealing — these offers average a 3 percent click-to-conversion rate
Miles Rise to the Top
- Usage increases when you look at just miles offers, online shoppers are almost six times more likely to use an offer with miles than one that doesn't offer miles or points
- Offers that include miles have a 17 percent click-to-conversion rate, versus the 3 percent click-to-conversion rate of offers that do not offer points or miles
- Online shoppers are almost one and a half times more likely to use an offer with miles than an offer with points
- Offers that include rewards points have a 12 percent click-to-conversion rate, versus the 17 percent click-to-conversion rate of miles offers
How Many Miles? Almost Enough to Fly From Chicago to Tokyo and Back!
- The average online shopper earns 11,600 miles a year
Billeo creates free apps that save people time and money while shopping and paying bills online. Billeo also provides banks, credit card companies, credit unions, airlines and loyalty providers, with context-aware shopping and bill pay technologies that help them better interact with their customers online.
The analysis is based on the 2011 aggregate shopping habits of more than 100,000 online shoppers in the Billeo network. More than 40 banks, 20,000 billers, 1,500 merchants, six of the top 10 card issuers and two of the top five airlines are part of the Billeo network. Cash back offers were not included in this analysis.