The location: USA

A risk-managed promotion helps regional retailer to compete at critical time with a compelling cashback offer, while protecting it from over redemption and locking-in profits.

The Challenge

Howard’s is Southern California’s largest independent appliance retailer, having built a reputation over 75 years for customer service and affordable luxury. It regularly organizes and runs sales promotions and manufacturer-sponsored rebates but when appliance manufacturers halted most, if not all, of their promotional offerings due to wide-spread supply constraints as a result of the global pandemic Howard’s looked to run its own in-house promotions.

Howard’s wanted to able to react to market changes, be nimble in promotional planning, and have the flexibility to promote based on product availability.

When the US Government announced the American Rescue Plan to support economic recovery at the beginning of 2021, which included households across the US receiving checks of $1,400, Howard’s moved fast to set up a new promotion that nobody else could offer. Speed was of the essence to steal a march on its competitors.

The Solution

To deliver a custom and effective sales promotion, and do so quickly, Howard’s turned to the support of Opia.

Partnering with Opia meant Howard’s internal teams and store associates were relieved of the burden, and a fully managed sales promotion by Opia meant that high customer service standards would be maintained.

Opia recognized that a cashback program would be the most compelling offer due to job loss and other financial pressures created by COVID-19. Therefore, it initiated a tiered cashback promotion with the aim of creating more brand awareness and increasing the average sale value.

The cashback promotion, which lasted for 62 days, started at $100 back for spending $1,400 and was tiered up to $400 back for a $5,600+ spend. The customer could choose to take this reward as a prepaid digital or physical card or receive the money via PayPal.

The promotion was hosted on a dedicated and branded promotion website to manage the customer’s journey from end-to-end, including post promotion support.

Not only was this an innovative custom-built solution but it was also a risk managed, insured promotion with highly sophisticated technology that prevented any potential fraud, protected claimants’ data and managed the delivery of the rewards.

The Results

The results were exceptional and demonstrated the effectiveness of cashback promotions during the pandemic.

The average order value was 23% higher than the same period in the previous year, and the average value increased by 14% during the Stimulus Program which ran from the beginning of 2021.

The total unit per transaction increased from three units to four units compared to 2019 and the promotion drove higher average sales prices, encouraging customers to spend more.

John Riddle, President and CEO of Howard’s says that working with a specialist partner like Opia gives regional players the support they need to compete with national retailers.

“Opia allowed us to nimbly react to market changes and execute a promotion flawlessly, making us very competitive against powerhouse big box retailers who control the market share. Having a risk-managed promotion allowed us to run a creative offer with very strong rewards, while being protected from over redemption and locking-in profits.”

— John Riddle, President and CEO