An Australian start-up has become the top dog in its industry without any investor funding – it’s a case of pioneering a strong business model, underpinned by a philanthropic philosophy – and it’s resulted in a speedy trajectory of success.
In fact, as Australia’s leading shopper savings website, Cashrewards disrupting the way Aussies shop online, driving a massive $100 million of Aussie shopping dollars to local and overseas online retailers since January this year, $30 million of which has been in just this past month.
The disruptive difference is that shoppers are rewarded with exclusive savings that can be stacked with online cashback straight into their bank accounts to significantly reduce prices on everything they buy, making it a very irresistible choice for online shoppers.
What is the story behind Cashrewards?
Cashrewards.com.au started as an idea borne from proven online cashback models that have been hugely successful in the UK and US, combined with founder Andrew Clarke’s experience working with a diverse range of businesses.
Now Managing Director of Cashrewards’ umbrella company ShopGo, Clarke (pictured) has had a career spanning an amusement toy business in his twenties, to working in a health footwear business, to a cleaning business. Prior to founding Shopgo, Clarke also held senior positions in the entertainment and hospitality industries.
More recently, Clarke was an integral part of the development of many highly successful online sales presences that have achieved major market penetration throughout Australia.
However it was while working in the hospitality industry and partnering with wotif.com.au that Clarke realised the potential of performance marketing.
Within the hotel business, Clarke found the commission structure of online travel agents being paid with each sale was a win-win partnership – and he began to think of ways to apply it to a new business idea.
Clarke was interested in looking for a new way to fundraise, integrating philanthropic endeavours with business, when performance marketing crystallized his business model for Cashrewards.
Using the online cashback concept, each sale through the Cashrewards platform to retail partners would result in commission – a percentage of which the business would then give back to its customers, with funds going directly into their bank accounts.
He asked his developer Michael Wolf if he could build it. Michael said yes – and Cashrewards came to fruition.
How is Cashrewards doing so far?
Fast forward to 2015, and Cashrewards has grown from two men working at a kitchen table, to a staff of 25, fast becoming number in the local cashback industry with a $6 million turnover in just one year (and growing fast) without any financial backing.
Today the online cashback industry is a global phenomenon, with huge take-up in the UK and US, but in Australia it is still in its nascent stages.
Most of Cashrewards’ growth has happened within the past 12 months, off the back of acquiring key retail partners, including eBay, David Jones, Woolworths, Coles, Dan Murphy’s and Chemist Warehouse, in addition to big name overseas department stores like Saks Fifth Avenue and Macy’s.
It now has over 1000 retail partners. The average order value of sales through Cashrewards has always been high, but this too has grown and now sits at around $140 per transaction.
The overall increase in online sales and increased interest in performance marketing by key brands was also a factor in Cashrewards’ growth.
Not too long ago, David Jones didn’t even have an online website, and Harvey Norman made it known that they weren’t interested in ecommerce. It’s only recently that big brands have become much better at online marketing in Australia.
Major merchants are joining Cashrewards each month, to take advantage of the sales platform.
Cashrewards also attributes their speedy growth to the general ‘share of wallet’ onto online increasing YOY, with consumers recognising that Cashrewards offers the best savings, discounts and cashback available online.
Surprisingly, Cashrewards has not marketed itself in a traditional sense at all. Customers have created awareness through online forums and social sharing to achieve viral, positive referral.
The Cashrewards opportunity speaks for itself, and so word of mouth endorsement has seen members garner more members.
Giving back in more ways than cash back
The simple, quick and efficient online cashback model is now also being applied to making charitable donations with Pink, as an initiative of Shopgo and the National Breast Cancer Council of Australia. A percentage of every sale through www.pink.org.au goes towards life changing breast cancer research, to “make your shopping count for more”.
Pink is just one of many virtual shopping centres that Shopgo has developed, with other programs operating for clubs and community groups as a member benefit, such as for the Penrith Panthers, Police Association of NSW, and a golfing community called Loyaltee.
Clarke says that this is the best part about their business – giving back. Whether it’s giving back to Cashrewards members, giving to a charity, or retailers only needing to pay per sale – it’s a model that everyone can feel good about.