Interview: Quidco on business transformation and impact on the high street

Online cashback company, Quidco, began in the UK 11 years ago and has since grown to seven million members in five countries, including France and Germany.

The cashback site claims to drive sales for retailers, while offering customers money back on goods they buy. While this type of affiliate marketing programme can seem complex, it is compelling for savvy online shoppers. Quidco's MD, Andy Oldham, describes how its business model gives 100% of the cash back to its members, for instance, if a shopper is buying a washing machine and buys it from after clicking through Quidco, the customer can receive up to 5% back in cash at a later date, paid into their bank or PayPal account, or choose to receive Amazon vouchers with a 2% uplift.

"It's a compelling customer proposition, they don't want points and it's four or five times the value of Nectar – cash is far more liquid currency than points," he explains.

Retailers provide the cashback money to Quidco from their marketing budgets, which Oldham says is favourable because it does not affect bottom line results in the same way traditional discounting does. And how does Quidco earn its money? Through advertising packages with the likes of Sky who pay to appear in a weekly offer round-up email, while premium Quidco members pay £5 a year for additional savings benefits.

Linking on and offline

Out of the seven million Quidco customers, the average shopper is between 30-44 years old, ABC1, internet savvy and careful about where they spend their money.

But Oldham claims Quidco can also help drive customers into physical shops on the high street through its card-link platform. Members who register their debit or credit card with Quidco earn cashback when they use them to pay for goods and services in store.

Meanwhile, by merging the company's mobile app with the card-link technology, members can activate offers and increase their cashback rates, and for retailers this means attracting more customers into their store over a competitor.

Oldham describes how a high street retailer often has no visibility of a customer when they walk into a store. But the 50 of Quidco's partner retailers can advertise specifically to the two million cards on the platform, encouraging them to spend in their store, increase their basket sizes, while identifying in-store shoppers.

eCommerce innovations         

But Quidco's core business is still its an online platform, which is about to go through a revamp, restructuring its infrastructure and providing consistency across its international sites.

"We'll have richer content and discovery element, as well as offers," says Oldham.

He says the retailer is also looking into conversational commerce to be able to communicate with customers on platforms like Facebook, while Uber and Hungry House are also signed up the platform and are embedded in the app. "For instance if you're talking in a Facebook group about going to the cinema, that's an advertising opportunity and how do you push a cinema offer within the context of that conversation?"

The customer could then be presented with directions to the cinema in the app, or they will be offered the opportunity to travel there by Uber, generating more cashback from that ride.

Because Quidco is a privately held business, it is able to plough profits back into growth. "It's constant innovation," says Oldham. "We have the agility to make those decisions and we don't get everything right all of the time, but we fail fast."

Oldham points to the card-link technology as an example of a growing trend in the banking community which Quidco was able to deliver quickly. "We saw that entry into the offline space before the banks did and we're not a bank, but we have an audience of card holders."

Oldham spent a number of years building internet banks, learning how technology can merge with the financial sector. He is also a big advocate of start-ups, encouraging companies to scale in the Quidco offices – like an unofficial incubator. "We like to have our own start-ups, set them up in an office, scale and house them in the local area. I'm a believer of having a team dedicated on a certain topic," he explains. "And if we're investing cash in that business, we can offer a little bit more, both in cash and expertise but also users and bringing their products to the market."

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