Discounts and deals have long enticed humans. Who doesn’t like a bargain? It’s pretty logical, and also psychological. The mental rush associated with saving money is well established. However, some studies indicate the excitement of redeeming a coupon is greater than simply paying less for a product that is not discounted. According to Psychology Today, the thrill of using a coupon and getting a better deal than other consumers takes precedence and shoppers lose sight of the actual cost. The mere feeling that they are buying something at a bargain price is enough to persuade people to place an order.
Mark Bradshaw, at Snapnsave, while working with many brands in the retail space could see that traditional methods of promotion like regular discounts, loyalty cards, points, and paper coupons were inadequate for marketers to boost their bottom line, especially in this digital era. Each individual with a mobile phone carries more technology in their palm than what took us to the moon. So Mark took on the task to devise a way, whereby consumer brands are able to reach and entice customers in a more efficacious fashion, making use of mobile phone technology.
Today, Snap n save is one of the leading cashback coupon apps that gives shoppers money back on their favourite products from retailers, by uploading a picture of their till slips, which they fondly call ‘till slip selfie’. The good part is that the cashback does not necessarily have to be spent on particular products nor does it go to an e-wallet, but can be transferred to the bank accounts of the shoppers. The website claims to have rewarded over USD 468 K in cashback since its inception in July 2015. Note here, that about 1/3 of consumers would be willing to shop at a new store if a cashback offer was presented, as per a report by RetailMeNot, an American online coupon website.
The launch of SnapnSave, where Mark serves as Founder and CEO, comes in the wake of a surging global trend that will see over one billion people globally expected to use digital coupons by 2019.
The company enables the deals by leveraging its expansive network with brands. It has tied up with numerous consumer brands, including global giants like Coca-Cola, Johnson & Johnson. Here, mark adds “You name the brand and you will find it to be our partner”. The brands give a commission to Snapnsave for every sale pushed by the platform.
Marketing initiatives involve consumer retention and acquisition through digital channels. “We are very focused on customer satisfaction in two areas: experience and cash back.” Says Tiffany Lindeque, head of retention- Marketing, at Snapnsave. The current company strength is about 20.
Snap n save proudly tells that they have reached 250K shopper sign-ups, growing 10-15% MoM. The company also reports impressive figures on the revenues, up 200% QoQ.
Kalon Venture Partners, formerly Grotech, and Smollan Group SA both acquired a minority stake in SnapnSave. Kalon, a venture capital fund and Smollan Group, a leading international retail solutions business invested USD 596k each. This has been followed by an initial angel investment injection the startup received just when it had launched.
Going forward, the agenda is to consolidate the South African market as “however much you have grown, you must still keep learning from the past’’ remarks Mark. With these learnings on board, the team is set to test grounds of an Asian market, and scale to about 3 to 5 economies. Singapore, Malaysia, and Vietnam are on the plan. They are also looking at Nigerian and Kenyan markets.
For the longer term, they have identified about 40 markets across the world where they could potentially expand to. These economies have been selected on the basis of a higher propensity to use smartphones as well as digital coupons. He is not very keen on entrenching deep into the African continent for reasons of having to educate consumers first about the entire concept and wait till they internalize it and start using the same. However, penetration into Asian markets will be facilitated by their investment partner Smollan’s network, which is present in more than fifty countries.
Ebates in the US is the foremost name one would hear in the cashback industry. TopCashback and Quidco stand to be its tough competitors in the UK. The cashback model, that is well-established in the UK and US, is now taking root in the SEA region where players like ShopBack have emerged big. This Singaporean equivalent of EBates raised a second round of UDD 25 Mn to expand to SEA. Cashkaro is pioneering the same in India.
“We identified 35 Indian companies in this worldwide ranking of cashback industry leaders,” said Douglas G Hall, lead author of the report on global cashback industry “Cashback companies in India have seen significant growth and more than USD 4 Bn in venture capital investment. India is the most exciting market in the global cashback industry at the moment.”
The thriving Coupon and cashback industry is begetting an exponential rise of the e-commerce here. SEA internet economy is projected to grow to USD 200 Bn 2025 by Google and Teamask according to a report released in mid-2015. This would push the cashback industry to rise in a cyclical effect. Interestingly, a year later, the two firms adjusted their predictions upward to say that the CAGR has rocketed from 20% per annum to 27%. Hence the region is on the course to be worth more than that.
Back to South Africa, here the app faces very little competition. While there are startups giving deals for online shopping, this niche category serving retailer based promotions, is still underdeveloped.
“A challenge faced by any marketplace is to balance demand and supply. We currently are trying their best to ensure to that there are enough deals/coupons on the app to keep the users glued,” says Mark, who is hugely bullish on his business despite all odds.