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Marketing

Ebay, Wesfarmers strike loyalty deal ahead of Prime launch

Ebay Australia has announced a partnership with Australia’s most popular loyalty program, in a significant move to strengthen customer retention ahead of the imminent launch of Amazon Prime Down Under.

As of yesterday, Ebay shoppers can collect and redeem Flybuys points [the Wesfarmers-owned loyalty program] with 40,000 Australian retailers on the marketplace, earning one point for every $2 spent on eligible items.

Julie Nestor, Ebay Australia’s chief marketing officer, said the e-commerce company had originally approached Flybuys with the idea for the partnership and described the deal as a no-brainer.

“We’re thrilled to partner with Australia’s most popular loyalty rewards program as part of our mission to continue innovating and transforming the retail industry,” Nestor told Internet Retailing.

“As with many arrangements of this type, the commercial details around the partnership are confidential.”

The partnership with Ebay is the biggest expansion of the Flybuys program since it added Virgin Australia’s frequent flyer program, Velocity, as a partner in 2016.

It comes as Wesfarmers pushes to better leverage its digital and data capabilities, in the context of the planned demerger of Coles supermarkets next year.

In February, Wesfarmers group managing director Rob Scott announced the creation of a new data unit within the retail conglomerate, to pursue a variety of projects across its business units, as its rival Woolworths steps up its own efforts.

Wesfarmers will retain ownership of Flybuys in the Coles demerger, a move that was flagged by Scott in March as a strategic boon.

Under Wesfarmers, Flybuys is expected to pursue synergies with Bunnings, Kmart and Target, while extending the scope of loyalty assets to third parties.

Ebay estimates that over 60 per cent of Australian households who actively use Flybuys, will now also be able to redeem points for Ebay vouchers at a rate of 2,000 points for $10, which they can use to purchase items from the e-commerce company’s 1.1 billion global listings.

The online marketplace said its partnership with Flybuys will help smaller retailers on the platform gain access to a widely recognised loyalty program, which they likely would not be able to do on an individual basis.

Citing a survey conducted with 1,570 sellers in April, Ebay said 62 per cent of small retailers believe a rewards program would help their business compete with larger players, while 71 per cent believe a loyalty program would be too expensive to set up and run.

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