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Based on the “earn and burn“(1) principle, cagnottage is now a must in the retail world. Thanks to this system, customers benefit from “discounts” when they make purchases, the amount of which is credited to a loyalty card or a payment card that can be used within the store. This transactional type of loyalty technique can be used in different ways:
However, if kitty can be used as a “discount” by deducting the amount to be paid, one must keep in mind that kitty used as a payment method generates a different and positive sensitivity for the customer.
After accumulating monetary benefits, customers can use their loyalty card linked to the kitty in full or in part to pay for their purchases with the accumulated balance.
At a time of health and economic crisis, consumers are more than ever looking for monetary benefits, especially in order to improve their purchasing power. In this respect, the loyalty program with a kitty is the most popular reward tool for the French, to the detriment of other techniques perceived as less relevant: promotions, coupons, vouchers or even point programs.
The kitty is also perfectly in line with the spirit of the dematerialization of tickets and coupons. Indeed, from January 1st 2023, unless otherwise requested by the customer, are prohibited
The relevance of dematerialized coupons is not obvious, whereas the kitty, provided it is easy to read for the customer, will remain very relevant.
– 73% of French customers declare that tokens are their preferred type of loyalty program, ahead of promotions and coupons(1). –
These results are not a surprise since, already in 2018, kitty programs accounted for 22% of promotional spending in the retail sector(3). It has to be said that cash prize programs are particularly popular in the food and discount sectors(2). However, it is important to keep one thing in mind: in the absence of additional means (personalization of the relationship, etc.), such a system cannot be a guarantee of long-term loyalty, as customer volatility can be high.
There is an obvious reason why cash pools have gradually replaced coupons and other promotional programs: they meet customers’ desire for flexibility and simplicity.
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Are you interested in the challenges of omnichannel? Discover this dedicated content: Retail: how the Covid-19 has transformed your loyalty levers in your omnichannel journeys
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It is not only advantageous for the customers, but also for the brands as it allows to manage the loyalty program more efficiently, while limiting the costs.
As you can see, social media is above all a win-win tool, as it meets both the expectations of customers and the strategic needs of brands. Do you want to implement a kitty program? Discover Generix Omnichannel Sales.
(1)Consumers earn (earn) points or credits on their purchases before burning them (burn) by taking advantage of gifts, free services, or discounts. (2)Loyalty & Engagement survey – Ifop for Comarch – 2021 (3)Trends in consumption and retailing P02 2018 – Kantar – Worldpanel panel – 2018
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