This article was based on the interview with Shopback’s Carolina Paradas on how retailers are shifting their channel strategies with cashback by Greg Kihlström, AI Adoption keynote speaker for The Agile Brand with Greg Kihlström podcast. Listen to the original episode here:
As marketing leaders, we’re all navigating a landscape defined by a familiar pressure: the mandate for profitable, measurable growth. The era of “growth at all costs,” fueled by venture capital and a forgiving market, has decisively ended. Today, every line item in the budget, every channel in the mix, is under scrutiny from the C-suite. The conversation has shifted from vanity metrics and upper-funnel awareness to hard ROI, customer lifetime value, and sustainable acquisition costs. It’s a climate that demands not just optimization, but a fundamental re-evaluation of our entire toolkit.
This new reality forces us to confront long-held assumptions. For years, many of us have viewed cashback and rewards platforms through a specific, often unflattering, lens: a necessary evil for promotional periods, a margin-eroding discount channel, or a race to the bottom for bargain-hunting customers. But what if that perception is outdated? What if, in our search for efficiency and ROI, we’ve been overlooking a powerful strategic lever hiding in plain sight? When a brand as famously protective of its promotional strategy as Zara makes its first-ever move into the US cashback ecosystem, it’s not just a seasonal tactic; it’s a market signal that something significant has changed.
The Double-Sided Pressure Cooker: Why Now?
The current surge in brands embracing rewards platforms isn’t a fleeting trend; it’s a direct response to a convergence of powerful external and internal forces. Externally, the macroeconomic environment has fundamentally altered consumer behavior. Internally, the demand for accountability in marketing spend has never been higher. This creates a double-sided pressure that makes performance-based channels more attractive than ever.
It’s one thing to understand that consumers are more price-conscious; it’s another to build a strategy that meets them where they are without simply devaluing your product. The brilliance of a modern rewards strategy is that it provides tangible value to the consumer while simultaneously delivering a measurable, performance-based outcome for the brand. It shifts the dynamic from a simple discount to a value exchange. Carolina Paradas explains this dual reality with perfect clarity.
“No retail brand…can afford to ignore the fact that users need to stretch their dollars… When we look at what CMOs, what CFOs are looking for is actually having a return on investment on what you’re doing. And versus, you know, previously you think about 2021… it was all about more vanity or like upper funnel, um, KPIs, versus now we’re all asked, right? Um, to be able to prove the value of everything that we’re doing. Longer the days of free money being kind of thrown up people.”
Paradas’s point is critical for any leader justifying their budget. The conversation is no longer about impressions or clicks alone; it’s about a direct line from spend to revenue. Unlike traditional advertising where attribution can be a complex and often murky science, performance-based models like cashback offer a clear, defensible ROI. You are paying for a completed action—a sale. This is a language the CFO not only understands but appreciates, making it a far easier conversation than justifying a seven-figure brand awareness campaign with ambiguous future returns.
Beyond Acquisition: The Shift to a Retention and LTV Mindset
The traditional critique of rewards channels has been that they attract disloyal, one-and-done customers. The assumption was that you were paying a premium to acquire a customer who would never return without another incentive. While there may have been some truth to this in the past, the strategic application of these platforms has evolved significantly. As the cost of new customer acquisition continues to skyrocket across paid social and search, the focus has pivoted sharply towards retention and increasing lifetime value (LTV).
Leading brands are now looking at rewards platforms not just as an acquisition engine, but as an outsourced loyalty and retention tool. This is particularly valuable for brands that lack their own robust, built-in loyalty program. By partnering with a platform, they can reward existing customers, encourage repeat purchases, and increase engagement without the heavy lift of building and maintaining a proprietary loyalty infrastructure. This marks a strategic shift from using these channels purely for top-of-funnel acquisition to leveraging them for mid-funnel retention.
“We’ve seen a shift on specifically brands that don’t have loyalty programs themselves, um, on a focus on existing customers…if you think about the customer, the the cost of new customer acquisition, it’s huge. So how, you know, previously in the past, why when brands focus in that existing user. And that’s where we’ve seen kind of the shift and that’s a newer KPI, right? When you look at lifetime value and what is the overall existing customer, um, quality that you’re bringing in.”
This is a profound change in how we should measure the success of these partnerships. The key metric is no longer just “new customers acquired.” It’s now a more nuanced set of KPIs: What is the repeat purchase rate of a cashback-acquired customer? How does their LTV compare to customers acquired through other channels? Can we reactivate dormant customers with a targeted offer through a rewards partner? By focusing on the quality and long-term value of the customer, we move the rewards channel from a tactical cost center to a strategic investment in the health of our customer file.
The Modern Value Exchange: Meeting the “Instant Gratification” Consumer
Perhaps the most significant change is in the consumer mindset itself. The idea that rewards are only for a specific, lower-income demographic is a dangerously outdated stereotype. In today’s economy, financial savvy is a universal trait. From Gen Z students managing a tight budget to high-income households optimizing their credit card points, everyone is looking to maximize the value of their spend. The consumer isn’t necessarily looking for the cheapest option; they are looking for the smartest option.
This new consumer expects an immediate and transparent value exchange. The old model of “shop with us for a year, and maybe you’ll accumulate enough points for a small discount” feels archaic. Today’s mobile-first consumers want to see the benefit upfront, at the point of decision. This expectation of instant value is a core driver behind the success of platforms that make the reward clear and immediate.
“What we’ve seen in today’s world is that users want to understand why to shop with your brand. They want to see the value instantly. They don’t want to shop and then see how you engage me and if you have a brand loyalty program. No, they want to see that value instantly, which is driven is driven rewards to be something more mass market versus like a an assumption of a lower, um, income demographic.”
This insight requires a mental adjustment from us as marketers. We often think of “brand value” in terms of abstract concepts like identity, story, and community. While those are undeniably important, for a growing segment of the market, the most compelling brand value is the one that directly benefits them in the moment of transaction. By integrating a cashback offer, a brand isn’t diluting its identity; it is simply speaking the consumer’s preferred language of value. It’s an acknowledgment that in a competitive digital marketplace, providing a clear, immediate reason to choose your brand over another is a powerful form of brand building in itself.
The role of cashback and rewards in the modern marketing mix is undergoing a well-deserved strategic renaissance. What was once dismissed as a simple discount mechanism has evolved into a sophisticated, multi-faceted tool for driving measurable growth. It directly addresses the dual pressures of a value-conscious consumer base and an ROI-focused C-suite, offering a clear, performance-based model that is increasingly difficult to ignore. The agility required of us as leaders is not just in adopting new technologies, but in re-examining old channels with a fresh, unbiased perspective.
As we plan for the coming quarters, the question is no longer if rewards platforms have a place in our strategy, but how we can integrate them most effectively. It’s about moving beyond the simplistic view of acquisition and thinking about the entire customer lifecycle—from discovery and purchase to retention and advocacy. The brands that understand this shift and treat these platforms as strategic partners, rather than just another affiliate link, will be the ones who find sustainable, profitable growth in an economy that rewards nothing less.
