Before smartphones ruled pockets and cash-backs were in vogue, you had to swipe a loyalty card to claim rewards programmes. These days, the scope of loyalty programmes has widened to mobile apps and direct redemption through websites.
Accordingly, loyalty programme provider Payback is planning tie-ups in high-frequency transaction segments, such as neighbourhood stores, food-delivery companies, pharma stores, cab aggregators, quick-service restaurants (QSR), and over-the-top (OTT) players, among others.
On the cards are specially designed loyalty programmes by malls. Rijish Raghavan, COO, Payback India, points out that the company is likely to formalise tie-ups with OTT players and neighbourhood stores by December. It is also in advanced talks with cab aggregators to bring them on board.
“We generally try to bring on board the top two to three merchants across categories. In fact, we are seriously looking to bring on board players from sectors where customers transact frequently, say, a grocery store, and so on. In fact, OTT is one such segment we will bring on board within this year,” he told BusinessLine.
Payback has a GMV of more than ₹1-lakh crore, and has been profitable for about five years now. It has around 12 crore customers.
The overall loyalty programme market in India is still at a nascent stage. For example, a retailer spends ₹1 on every sale of ₹100 towards loyalty programmes. Customer redemption is only 35 paise.
However, in comparison, a developed market such as Germany sees a redemption rate of 95 paise on every ₹1 spent towards loyalty programmes by retailers.
Apart from players such as Payback, loyalty programmes are driven by in-house offerings from brands, retail chains, and the hotels and hospitality sector. E-commerce, which operates on a deep discounting model, has few takers (for loyalty programmes). Cash-backs dominate this segment.
However, Raghavan points out that these cash-back schemes have seen e-tailers burn cash. Payback prefers to stay out of such cash-back schemes. Rather, it is keen to work with more partners to ensure a comprehensive loyalty-point redemption scheme to users.
A previous global survey by Nielsen had stated that two-thirds of its respondents who participate in loyalty programmes agree that they join these programmes only to get free products or discounts.
When it comes to the most-valued loyalty-programme benefits, monetary incentives top the list. Interestingly, the same survey found that young users prefer loyalty programmes that come with non-monetary benefits.
Source: The Hindu