Originally Posted by
Tim_T
However, I just can't understand why these offers exist, and who is making money (apart from me) or taking the hit. It appears to me to be completely daft as a business model. Can anyone enlighten me as to the benefit?
Off course, long may it continue
It's a good question.
My assumption is that it is a simple "get people into the shop" offer. In most cases where they just give a proportion of the spend back then it is no more than a discount.
The ones like Harvey Nichols are slightly different, but remember that many people aren't doing what we do, and will spend rather more than £25 anyway, especially in shops like that.
In addition, with ones like Harvey Nichols, they know that for many people just giving a discount is not going to entice people in. For me, if the offer had been spend £50 and get £25 back I wouldn't have been interested, but at least the offer got me in the door and I saw what Harvey Nichols sell, and got a free bottle of very drinkable wine for my trouble. In my case it just confirmed that I wouldn't want to go back, but then I am probably not typical.
The one that does puzzle me a bit more is the mix of demographic. I can imagine Amex users who would shop in Harvey Nichols, but I don't imagine them using rather niche social media sites. I'm probably wrong though.