Cashback-what next?

In the fight for the online shopping pie merchants are willing to pay commissions that range from 1% to 50% to attract shoppers.  What does this mean for your own company when noticing that this can be a profit for you and a added benefit to your members.

According to comScore, consumers spent more than $160 billion online in 2011, and that number is only expected to increase. E-commerce is the fastest growing retail market in Europe. Sales in the UK, Germany, France, Sweden, The Netherlands, Italy, Poland and Spain are expected to grow from £132.05 bn [€156.28 bn] in 2014 to £156.67 bn [(€185.39 bn] in 2015 (+18.4%), reaching £185.44 bn (€219.44 bn) in 2016. In 2015, overall online sales are expected to grow by 18.4% (same as 2014), but 13.8% in the U.S. on a much larger total.

Regular and Unceasing Growth

The recession has induced many shoppers to buy online rather from traditional stores, whilst above-average growth in countries with smaller ecommerce sectors shows there has been an element of catch up. Retail focus on the growing use of mobile technology is an additional factor in making online retailing attractive and convenient.

The European online market is dominated by the UK, Germany and France which together are responsible for 81.3% of European sales in these eight countries.

Online retail sales graph

Mobile ecommerce

Many retailers already report that up to one-half of website browsing occurs through customers using mobile devices, both smartphones and tablets. However a much small proportion actually uses their mobile device to make the final purchase. In 2014, total ecommerce via mobiles in Europe was £20.09 bn [€23.77 bn], which is expected to grow by 88.7% to £37.91 bn [€44.87 bn] in 2015. The UK figures are £8.41 bn in 2014 rising to £14.95 bn in 2015.

The U.S. mobile share is predicted to grow from 18.7% of all online retail spending to 26.8%, or the equivalent of £30.39 bn ($57.38 bn) to £57.72 bn ($93.58 bn).

Online Spending by Device 2014-2015

Graph - Online Spending by Device 2014-2015

Since you have the ability to share your commission with your members in the form of points or cashback suddenly increasing member benefits without increasing costs became more simple. Merchant funded cashback can be a source to reckon with when trying to find ancillary revenue to your company. With the amount of money being spent online everyday all over the world it is not hard to see that sharing that money with your members and earning some for your company can be a win-win situation.

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