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Cash Advances: It Pays to Use This App
A new app rewards shoppers with cash when they mention products on Facebook, take a survey and otherwise engage with brands
Carol Angrisani
November 4, 2013
7 Min Read
Redner’s Markets knew it needed to explore a new mobile app when shopper after shopper asked for it.
The more the Reading, Pa., chain learned about Ibotta, the more it liked the platform.
Denver-based Ibotta is a free app that rewards consumers with cash for completing brand surveys, polls, mentioning products on Facebook or performing other “tasks,” and then purchasing the product at a participating store.
Ibotta works at more than 50 retail chains, including Walmart, Target, Safeway, Kroger, 7-Eleven, CVS, Walgreens, Sam’s Club and Whole Foods Market.
Redner’s became part of the Ibotta retail network in March. About 1% to 2% of its shoppers currently use it.
Redner’s liked the fact that Ibotta requires shoppers to engage with brands on Facebook, Twitter and other social media.
Read more: Ibotta Mobile App Gets Retailer Support
As more consumers turn to their smartphone for savings, Ibotta makes the shopping experience less mundane, said Eric White, Redner’s spokesman.
“Customers are looking for fun and innovative ways to add value to their shopping trip,” he said. “This lets them do that.”
Through Ibotta’s geofencing capabilities, Redner’s shoppers receive targeted messages when they are 50 to 100 meters within a Redner’s store. Such messages can be customized based on user demographics, prior purchase history and responses to poll questions.
“The app allows the consumer to utilize the functionality while in-store, possibly creating impulse purchases,” White said.
Food Lion will extend its use of Ibotta next year to its private-label products.
Just like Redner’s, Food Lion got involved in Ibotta based on customer requests.
Since its coupon policy prohibits double and triple coupons, Ibotta lets Food Lion shoppers save in another way, according to Autumn Sullivan, Food Lion’s senior digital specialist.
“This enables us to provide an additional method to save money without making adjustments to our coupon policy,” said Sullivan.
Food Lion plans to expand its use of Ibotta next year by offering rewards for private-label purchases. Consumers who answer questions about the brand will earn savings.
Such consumer data is critical to Food Lion’s private-label research and development, said Sullivan.
“This is an easy, controlled way to get consumer feedback,” Sullivan said.
Ibotta currently has about 150 offers. Among them: Consumers can earn 25 cents, 50 cents, 75 cents or more by buying brands from Coca-Cola, General Mills, Kraft, ConAgra and other consumer packaged goods companies. Bonus earnings are given to those who refer friends, participate in games and other challenges.
Ibotta Chief Executive Officer Bryan Leach emphasizes that Ibotta is not a coupon app.
“Unlike coupons, which are a one-shot fixed reward, we allow people to earn cash across multiple trips, based on how much they interact with and learn about a brand,” he said.
'Pay-for-Performance'
The typical Ibotta user collects about $5 a month.
The pending cash is released into the user’s PayPal account once the consumer performs the task, and then purchases the product at a participating retailer. The purchase is verified when the consumer takes a picture of the receipt with a smartphone and sends it to Ibotta. Some retailers even link their loyalty cards so that they can redeem offers automatically.
Along with PayPal, Ibotta soon will offer users the ability to cash out to iTunes, Redbox and other gift cards.
There is no cost to the retailer. Manufacturers pay only if the consumer not only engages with the brand, but also purchases it.
“This is true pay-for-performance media,” he said.
Ibotta currently has about 150 offers.
Evol Foods, Boulder, Colo., a frozen food manufacturer, started working with Ibotta in March because it liked the idea that it could engage shoppers in a valuable way.
One offer awarded 25 cents to Ibotta users who shared info about Evol on Facebook or Twitter; or 50 cents if they watched a short video about the brand.
Evol has moved about 15,000 to 20,000 units by using the Ibotta platform, according to Tom Spier, Evol’s chairman of the board.
“The [product] movement has been meaningful,” said Spier.
What makes it so impactful is that manufacturers only pay out when a product is purchased.
“We’re not shelling out money just to get impressions,” he said.
Through Ibotta polls and surveys, Evol also gains valuable information about who buys its products.
“We’re learning things about our consumers that are important to our sales and marketing teams,” he said.
Ibotta joins checkpoints.com, scvngr.com other apps that offer a “value exchange,” said Liz Crawford, vice president of strategy and insights for shopper-marketing consultancy Match ShopLab, and author of the book “The Shopper Economy.”
A value exchange is when a brand delivers value in return for customers’ valuable time, effort, trust and/or information.
Consumers recognize that their time, attention, privacy and effort are worth something — and appreciate getting a “return” on their engagement, said Crawford.
Retailers are launching their own value-exchange apps a well. Take Walgreens’ app. Through Walgreens’ “Steps with Balance Rewards” program, members earn points by walking, running and other logged and tracked weight management goals. Members will receive 20 points per mile, as well as 20 points per day for tracking their weight. Users also can log individual frequent activities that will earn points when recorded.
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Point rewards can be redeemed for dollars off a future purchase
“The idea that I can earn money for doing something I may already be doing is powerful,” Crawford said.
Participants benefit by earning points. Walgreens, in turn, enjoys shopper loyalty and trip frequency.
By offering a value exchange, marketers can enhance the brand experience, enabling even simple promotions to contribute to brand attachment, said Crawford.
The concept has major implications for the marketing world, Crawford stressed. That’s because it pushes the labor of marketing to the consumer.
“Instead of hiring people to do sampling, you can instead reward consumers with points for buying a product,” she said.
Sidebar: Supermarkets Apps Good for Business, Study Shows
PARSIPPANY, N.J. — Supermarkets that offer mobile apps can drive consumer affinity for their stores, according to a study from Novartis Consumer Health here and Match ShopLab.
“Smartphones are a fantastic way to drive engagement,” said Cheryl Policastro, Novartis’ director of shopper marketing and insights, said in a session at the Path to Purchase Institute’s Shopper Marketing Expo in Chicago last month.
About 20% of consumers have downloaded a food store app, found the study, based on 2,340 primary household shoppers. The majority use them regularly, at least twice a month.
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Most supermarket app users have one to three children in the household, and are between the ages of 24 and 44. They also have higher than average income and education.
A strong majority (80%) said they use food store apps for coupons; 57%, specials.
“Overwhelmingly, it has to do with saving money,” said Liz Crawford, vice president of strategy and insights, Match ShopLab, a consulting firm.
A strong majority also said they use apps to have “fun.”
Of those who don’t use a supermarket app, 71% said they didn’t know they existed. That shows that retailers should promote the benefits of their apps.
Of those who knew about the app, but didn’t download it, nearly one-quarter (24%) said the benefits aren’t worthwhile.
As for complaints about apps, 48% said they are too slow; 29%, too time-consuming.
Among the features they want supermarket apps to have: more rewards, automatic coupon loading, more personalized offers and a price comparison tool.
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