customer incentives in retail

The benefits of providing customers with incentives in retail

Offering customer incentives in retail can be a real game-changer for brands. The most obvious reasons to incentivize consumer shopping behaviors are to establish brand loyalty, increase awareness, and boost sales. However, there are many additional benefits of implementing a customer loyalty program that offers customers incentives. Your brand can leverage mobile technology to easily implement a customer incentive program that helps you reap the many benefits.

Types of Customer Incentive Programs in Retail 

The best customer incentives in retail should be delivered by a program that is easy to access and convenient to use. Having the ability to reach a customer while they’re in a purchase mindset is integral to boosting sales. Though, being able to encourage someone to make a purchase when they weren’t necessarily looking to do so is even greater. When offering incentives, brands should consider these types of rewards programs:

  • Points-based rewards: The points system is the most popular type of rewards program. For instance, with Shopkick, shoppers accumulate “kicks,” or rewards points, for particular behaviors like visiting the store, scanning a product, or making a purchase. Then, the points can be redeemed for free gift cards. Other programs may link points to discounts, upgrades, or services. 
  • Partnership rewards: Brands strategically partner with complementary companies to provide generous and unique incentives beyond traditional offerings. For instance, a veterinary office may partner with a medical dog food brand to better service their clientele with a co-branded offer.
  • Tiered rewards: At its core, a tiered program works like a points-based program, except that the benefits increase when a customer reaches a certain number of points and achieves a different level. Zappos has its program structured as Silver, Gold, Platinum, and Elite.
  • Fee-based programs: Customers pay to subscribe to a rewards program that allows them to receive bigger rewards. This is most commonly seen with credit card companies but may include movie theaters, hotel chains, and services like Instacart.
  • Cashback programs: One of the most popular rewards among credit card companies is the cashback reward. A percentage of the total amount spent is given back to consumers as a “thank you” for choosing a brand. 
  • Charitable giving programs: The Amazon Smile program donates 0.5% of a purchase to the charity of the shopper’s choice. This type of program is a great way to show consumers your company mission aligns with their values. 
  • Referral bonus programs: Meal-kit service providers like Hello Fresh and Blue Apron routinely employ a program that gives free boxes of food to new prospects and deep discounts to the person who referred them, so it’s a win-win for the referring customer.
  • Freebies: You can offer free upgrades, free products, free services, or free gifts for a qualifying purchase. This type of incentive can have a strong impact, as it offers an immediate reward. 

If a brand chooses to implement any one of these rewards programs, they can expect to reap the benefits.  

The Benefits of Customer Incentives in Retail

the benefits of customer incentives in retailBy incentivizing consumer behaviors, brands have the opportunity to boost more than just sales. Providing customers with incentives in retail also helps brands:  

  • Build customer loyalty. Research shows eCommerce customers who have had one positive shopping experience with a company are over three times more likely to buy again. Customers who shopped with a particular company multiple times are over five times as likely to buy again.  
  • Collect data. One study found a $10 monetary offer was most effective at increasing survey response rates, with a 30% increase. The use of incentives not only improves response rates but it also has the ability to improve the quality of data provided.
  • Improve brand reputation. Fifty-six percent of shoppers said a personalized incentive would improve consideration of the brand; 84% of those surveyed said they feel personalized incentives make a brand seem “smart,” “unique,” and “caring.” 
  • Increase brand awareness. Banks use incentives like free checking accounts and savings interest to attract new customers. Once loyal, these same customers are likely to choose the same financial institution to take out a mortgage loan or set up retirement savings.
  • Attract new customers. Providing an incentive is especially important for encouraging new prospects to choose your brand. Four out of five customers say they are encouraged to make a first-time purchase with a new brand if they find an offer or discount. 
  • Improve the customer experience. The incentive remains at the heart of a “feel-good” interaction with a consumer. Eighty-one percent of shoppers say finding a great offer or discount is “on their minds throughout the entire purchase journey.” 

Mobile apps can be influential in providing customers with incentives in retail as they allow brands to leverage tools such as a consumer’s location and their camera phone. An incentive program that extends beyond traditional marketing techniques will likely increase consumer engagement which leads to increased sales.

Shopkick Helps Brands Provide Customers With Incentives in Retail

Shopkick allows a brand to expand its reach, gaining the attention of consumers who they may not have been able to engage with on their own. Through the app, customers are encouraged to visit stores and make purchases more frequently. It uses a points system fueled by “kicks,” or rewards points, to motivate consumer behavior, raise brand awareness, introduce new products, and increase sales. Earning rewards makes customers feel good about their purchases which, in turn, makes them feel good about your brand.

Shopkick allows a brand to expand its reach, gaining the attention of consumers who they may not have been able to engage with on their own.

Brands partnering with Shopkick reap the benefits of offering customers incentives in retail.  For example, Barilla partnered with Shopkick when the brand wanted to raise awareness of its new type of pasta. Shopkick incentivized consumers to find the product in the aisle, scan it, and purchase it. By rewarding customers for engaging with the product, Shopkick increased the likelihood of future/repeat purchases by 68%.

Shopkick helps brands offer customers incentives in retail through our innovative shopping app. Contact us to learn more about how our partners use third party retail rewards app to improve customer retention marketing strategies.  

Image courtesy of David Prado Perucha



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Dima Volovik

EVP of Product and Engineering

Dima Volovik is the EVP of Product and Engineering at Trax Retail — Shopkick.

Dima Volovik is the accomplished product and engineering leader who led teams to deliver innovative and commercially successful e-commerce products, marketplaces, and enterprise solutions for Amazon, Comcast, Fandango, and Universal Music. Before joining Trax, Dima was the Director at Amazon, where he led product development and Engineering for Amazon Appstore and Amazon Prime Video, CTO at Fandango, and Paciolan, head of technology at Golf Channel/Golf Now, and Global VP of Direct to Consumer Technology at Universal Music Group. Dima’s expertise includes developing consumer products, marketplaces, and enterprise solutions.

Dima grew up in Baku, Azerbaijan, where he received his MS in Electrical Engineering from Azerbaijan Oil Academy, and he currently resides in Los Angeles, California, with his family.