Best Buy competes with online giants via Ibotta deals
Best Buy is driving incremental sales by offering rebates through the Ibotta application, which rewards consumers with cash for interacting with brands and making purchases.
With one deal that let consumers earn back $10 when they spent $100, it was only in the app for 48 hours because of how well it performed. Best Buy is also able to target different segments with unique deals based on data from Ibotta.
“The idea of an affiliate has always been an online idea and for the first time that’s becoming an offline idea,” said Bryan Leach, CEO of Ibotta, Inc, Denver, CO. “Companies like Best Buy are able to compete with companies like Amazon that rely heavily on online models at a similar structure which allows them to drive trips and compete with ecommerce on a similar playing field.
“Instead of having an affiliate model — which is here’s a link, click this link and whatever you buy there’s a 5 percent discount — Ibotta goes directly to the retailer and explains that what we’re trying to do is build loyalty for them,” he said. “That is very different than using mobile technology to put a coupon or promo code on a screen.
“The idea is to tell the story of the Best Buy brand, to get them product feedback in real time, to help people understand the brand in a different light that will result in follow up purchases without conditioning people to rely on discounts. It’s building the equity and loyalty to the Best Buy brand.”
Best Buy began using Ibotta in December and has continued to offer new rebates ever since. In addition to generic buy $100 get $10 back deals, the big box retailer is also working on segmenting and flighting deals based on the specific consumer, so the deals will vary depending on how often a particular consumer visits Best Buy, for example.
Best Buy currently offers two rebates in the Ibotta app. One is for the “Harry Potter and the Deathly Hallows Part 2” DVD.
When consumers post on Facebook that they bought the DVD, they will earn 25 cents back. Additionally, consumers can answer a questions such as, “How many children live in your household?” to receive another 25 cents when they purchase the DVD.
Consumers verify their purchase by scanning the bar code on the product and then taking a picture of the receipt. They can then cash out via PayPal or Venmo.
The other current rebate for Best Buy is for Perky Jerky Ultra Premium Jerky. When a consumer purchases a 2.2 oz. bag of any beef or turkey variety, they can earn back 25 cents for posting to Facebook and 25 cents for tweeting.
According to Mr. Leach, Ibotta’s user base is larger than other apps such as Shopkick and offers marketers such as Best Buy a desirable audience.
Additionally, Ibotta makes sure everything is tied to actual sales.
Consumers do not get rewarded purely for visiting a site or searching on Google. Instead, they must make a purchase to earn rewards.
“We’re not rewarding people for walking into Best Buy, we don’t believe in anything that is not directly economic,” Mr. Leach said. “We tie everything to sales. We are basically providing a pay per sale media platform on mobile that’s never existed before.”
Ibotta claims that 80 percent of its users are female, which is a demographic that tends to be underrepresented in consumer electronics stores and is of interest to Best Buy.
The Ibotta app rolled out in 2012 with a number of grocery stores onboard and has since been expanding to other categories such as electronics and apparel.
Burger King, Chili’s and Smashburger partnered with Ibotta in Nov. 2013 in an effort to drive repeat visits and loyalty (see story).
Since then, Ibotta has updated its app to simplify the navigation as well as let consumers cash out by Venmo in addition to PayPal. The company is also working on adding manufacturers in addition to retailers.
“We’re trying to build a platform that fits with the millennial landscape and is attractive to manufacturers and retailers,” Mr. Leach said. “At the end of the day, those brand media dollars are turning into more trips at Best Buy, which is what excites them.
“Instead of interrupting consumers with advertising, which has been the paradigm, we’re saying, your time is valuable, we want you to come and be a receptive audience, we want you to come here on purpose, and in return here’s this thing of value, which is you’re going to unlock a rebate,” he said.
“We’re really reinventing advertising on mobile devices. And we’re creating quid pro quo. It’s not about pop up ads. We believe that there is a way to get people voluntarily consume information and develop loyalty.”
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York