Future Commerce · with Oren Charnoff & Roy Rubin · October 7, 2022 · 50 min
Summary
This episode tackles the pervasive issue of discount addiction in ecommerce, particularly as brands face overstocking and a push for profitability. Fondue, co-founded by Oren Charnoff, introduces a post-purchase cashback model as a more efficient and profitable alternative to traditional pre-purchase discounts. This strategy helps brands convert more sales and increase profitability by targeting value-seeking customers without eroding margins on full-price buyers.
Key takeaways
Implement a post-purchase cashback model to replace blanket pre-purchase discounts, allowing for more efficient capital allocation and increased profitability by only incentivizing those who need it.
Offer customers the choice between cash back or a higher-value site credit post-purchase to cater to different value-seeking behaviors and increase customer loyalty and LTV.
Differentiate your discounting and merchandising strategies across sales channels (e.g., direct-to-consumer vs. Amazon) to align with specific shopper values and channel purposes, rather than applying a 'clone stamp' approach.
Recognize that while consumers are seeking value, brands can increase profitability by offering higher perceived value (e.g., 20% cashback) that effectively costs less than traditional percentage-off discounts.
Anticipate increased discounting in the market due to current overstocking and inflationary pressures, making strategic, profit-preserving discount alternatives like post-purchase cashback even more critical.
What’s the biggest addiction in eCommerce and how in the world can it be solved? It’s discounting and couponing! Fondue has a solution that has been shown to increase revenue, boost profits, and create win/wins for brands and consumers. Oren Charnoff, Founder of Fondue, and Roy Rubin, Founder of Magento and Investor join the podcast this week. Listen Now!
Implement a post-purchase cashback model to replace blanket pre-purchase discounts, allowing for more efficient capital allocation and increased profitability by only incentivizing those who need it.
What does this episode say about conversion & cro?
Offer customers the choice between cash back or a higher-value site credit post-purchase to cater to different value-seeking behaviors and increase customer loyalty and LTV.
What does this episode say about customer retention?
Differentiate your discounting and merchandising strategies across sales channels (e.g., direct-to-consumer vs. Amazon) to align with specific shopper values and channel purposes, rather than applying a 'clone stamp' approach.
What does this episode say about finance & fundraising?
Recognize that while consumers are seeking value, brands can increase profitability by offering higher perceived value (e.g., 20% cashback) that effectively costs less than traditional percentage-off discounts.
What does this episode say about dtc strategy?
Anticipate increased discounting in the market due to current overstocking and inflationary pressures, making strategic, profit-preserving discount alternatives like post-purchase cashback even more critical.
