Cashback or cash out? How will inflation affect coupon and cashback providers?
- Retailers need to boost business again
- Global Savings Group eyes offline retailers
- Cashback leaders sit across the pond
With inflation on the wrong side of seven percent, rapidly rising energy and food prices are the source of mounting concern among consumers. That’s great news for those dealing in coupons and cashback systems like the Global Savings Group, isn’t it?
It is not yet entirely clear whether the glass is half empty or half full. At first glance, however, it all seems quite simple: Prices have surged rapidly as supply chains bottlenecks cause shortages. That coupled with rising energy and food prices, among other things, means inflation has skyrocketed to record highs worldwide. As such, more and more people have been looking for ways to make ends meet, interest in discount vouchers and cashback systems is set to rise. Deals remain attractive even when pennies are pinched. That is the scenario that would lead to massive growth for the Global Savings Group.
It’s not the only possible outcome, mind you. There is also a chance that consumer concerns of inflation and rising prices subdue their inner bargain hunters, as they forgo making new purchases and decide to wear their clothes for an extra season and postpone purchasing new furniture or appliances indefinitely. In that scenario, the Global Savings Group would be just as vulnerable and fretful as others in the retail sector.
Retailers need to boost business again
Gerhard Trautmann is, of course, well aware of both scenarios. However, he’s an optimist. Founder and CEO of the Global Savings Group, Trautmann is bullish on the current massive growth potential. For starters, segments such as tourism have been booming since many covid restrictions have been lifted. This has led to a massive influx of business—and large shopping carts. And in the travel segment the Global Savings Group are high fliers. “Travellers are especially keen on finding discounts. Consumers also continue to invest heavily in home and garden products,” Gerhard Trautmann tells OMR.
And even in sectors that are currently struggling, such as fashion or electrical goods, Trautmann sees opportunities. “Many people purchased electronics, televisions for example, during the first phase of the pandemic. They have stagnated now, so of course brands and manufacturers are currently exploring ways of incentivizing and thus sparking new purchases.” Vouchers, cashback and gift cards could be just what does the trick. However, Trautmann sees an additional hurdle for some retailers: “Brands and retailers are currently under pressure to reduce their inventories, especially in the USA.
Founded initially in 2012 as Cuponation, the Global Savings Group has its roots in the Berlin startup factory Rocket Internet. In fact, the team surrounding Trautmann has previously startup experience, launching Dropgifts—with the backing of Rocket Internet. In 2016, Cuponation was rebranded Global Savings Group in order to reflect the expansion of its affiliate offerings.
Recently, the Global Savings Group has also expanded through acquisitions, including acquring Shoop in 2021. Based in Berlin, Shoop specializes in cashback services. When customers make purchases via Shoop from one of the company’s more than 2,000 partners, they receive cashback—not credit. That distinguishes Shoop from other providers such as Payback, Germany’s largest loyalty program, which only offers points that consumers can exchange for rewards or vouchers.
Global Savings Group eyes offline retailers
“Loss of purchasing power is a huge issue in customer psychology. Particularly among Gen Z and lower-income groups, increases in the cost of living and the subsequent need to save in other areas is a more pressing concern than even climate change,” says Trautmann. In his view, discount retailers in particular have a genuine chance to generate additional business. “I believe that Aldi and Lidl will continue to benefit strongly from the general conditions in the coming months.”
Trautmann, therefore, also hopes to further expand Global Savings Group’s offering in the short term. For example, they are currently working on a solution that places its cashback offering in stationary retail outlets—especially in the food sector. “We are also working with Gorillas and other rapid commerce providers on solutions,” he says. Details will be forthcoming in the ensuing months, he says.
Cashback leaders sit across the pond
Global Savings Group also sees a lot of opportunity in the D2C space. Currently, the company says it is adding 30 to 40 stores per week, with the aim of giving smaller retailers the opportunity to generate new customers and increase sales. On the whole, Trautmann sees great growth potential for cashback offers. He says that Europe is very much untapped compared to other regions, where the market is much more developed. “In our view, cashback has the potential to become as popular as it is in the USA. In Europe, we see room for an additional 80% in growth—easily.”
