The festive season is here, and so are ecommerce businesses with their annual sales and discounts to attract more customers and increase their sales. Due to the boom in the Indian economy and people spending more on shopping, the total sales value of online shopping in India is predicted to increase by 18-20% to 90,000 Crore rupees this festive season. Last year, it was 76,000 Crore rupees, as per a consulting company Redseer. Nearly 140 Million shoppers are expected to make purchases during the festive season sale this year.
This time, products like beauty and personal care items, household goods, and fashion are expected to play a bigger role and make more profit. People are willing to spend more on these items, which means higher prices for them. Also, companies are making more money from advertising and promotions during this time. This could make this year’s festive season the most profitable in terms of profit margins.
In the past, items like mobile phones, electronics, and large appliances made up more than half of the total sales value during India’s online festive shopping period. However, according to Redseer, this year, their portion of sales is likely to decrease.
For context, last year, mobile phones were the top-selling category, with 56,000 units sold every hour on online shopping platforms. In the first week of the festive season, mobile phones contributed 41% to the total sales value, while fashion items only accounted for a small 20% share.
The report mentioned that big companies are buying more online shopping businesses, especially in profitable areas like fashion. Notably, companies like Reliance, the Tata Group, and the Aditya Birla Group have announced purchases in the fashion and beauty sectors this year. They are doing this to make their online stores bigger and compete with other big players like Flipkart (backed by Walmart), Amazon, and Meesho.
In the future, brands that sell directly to customers (D2C) are expected to grow faster than online and offline retailers. According to Redseer, D2C brands’ revenue is projected to increase by 40% from 2023 to 2027. This growth is significantly higher than what online retailers (etailers) and traditional retailers are expected to achieve, which is 1.6 times and 3.6 times greater, respectively.
Interestingly, Redseer noted that big cities have been driving online shopping growth recently, even though people were spending less due to economic challenges. However, they anticipate that smaller cities and towns (Tier-I, II, and beyond) will also start shopping more, creating strong demand from all city tiers during the festive season.
With more people using the internet and smartphones, online shopping in India has grown a lot in the past few years. To illustrate this, in 2014, during the first festive season sale, the total sales value (GMV) of the online shopping industry was 27,000 Crore rupees. However, it’s expected to increase dramatically to 5,25,000 Crore rupees in 2023, which is nearly 20 times higher.
The online shopping industry in India has become a way to understand what people want to buy. This year’s 10th festive season sale is particularly important because there has been a recent slowdown in spending, and the economy has faced various challenges for almost three years.
Thus using such loyalty programs, like offering discounts and vouchers, that reward customers for their purchases and encourage them to shop more is quite common around this time.
However, not all loyalty programs serve you equally. While some are more appealing and beneficial to both you and your customers, some may actually be harming your brand reputation. Let’s explore how cashbacks might be your best bet while choosing a loyalty program this year.
Cashback is an affordability tool where your customers earn back a certain amount of the purchase value while shopping online. Unlike discounts, which reduce the price of the product at the time of purchase, cashbacks are credited to the customer’s account right after the purchase is completed. The customer can then use the cashback amount to shop more.
Cashbacks work as a win-win situation for both you and your customers. They get to save money and enjoy more value for their purchases, while you have the leverage to increase your sales, customer retention, and brand loyalty.
Why Cashbacks are Superior to Other Loyalty Programs
Cashbacks have a number of advantages over other types of loyalty programs, such as coupons, discounts, vouchers, etc. Here are a few examples:
- All a customer has to do to earn a cashback is to make a purchase. It’s that simple and straightforward. On the other hand, collecting a certain amount of points, redeeming vouchers, or using coupons to receive the benefit can seem too much work to your customers.
- Cashbacks do not expire or lose value over time and have no specific terms and conditions. Customers can use the cashback amount for whatever they want, which gives them a sense of freedom.
- Receiving a cash back gives people an instant gratification, as it’s literally some real money being credited to their bank account. This also creates a positive feedback loop, encouraging customers to shop more often.
- Offering discounts all year round can sometimes backfire, as it degrades your overall brand value. People start associating your products with discounts and would refrain from buying them at their usual price, whereas a cashback would simply come off as a bonus.
Why Every Ecommerce Business Should Try Cashbacks this Festive Season
The festive season is a golden opportunity for ecommerce businesses to boost their sales and revenue. However, it is also a highly competitive time, as customers have many options to choose from. To stand out from the crowd and win customer loyalty, you need to offer something extra and unique.
Cashbacks are the perfect solution for this challenge, as they will help you:
- Acquire new customers: Cashbacks can attract new customers who are looking for the best deals online. By offering cashbacks on top of discounts, you can offer more value and differentiate your brand from your competitors.
- Retain existing customers: By offering cashbacks on every purchase, you can reward your existing customers for repeat purchases and retain them for a longer period of time.
- Generate word of mouth: As much as people love getting rewarded, they love talking about it too. And that can result in a positive word of mouth for you in the market.
How Hatio Payouts Can Help You with Cashbacks
Hatio helps you make payouts to anyone quickly, efficiently and securely. If you want to build a smooth payout process that’s easy to integrate and allows you to keep a track of each transaction, be our guest.
With Hatio Payouts, you can:
– Create custom cashback campaigns based on your business goals and customer segments.
– Integrate with various payment methods, such as bank accounts, UPI IDs, cards, etc.
– Track and monitor your cashback transactions in real-time.
Being a Billdesk subsidiary company, we comply with all the legal and regulatory requirements and put your funds’ security first. Take the first step towards generating more sales and scaling your business to the next level. Get in touch with our experts to learn more.
