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Published 16 May 2013 11:54, Updated 17 May 2013 13:25
The co-founders of gamification start-up Wynbox, Damien Cantelo (left) and Sebastian Langton.
Hotels and resorts group Rydges have extended a campaign using retail gamification start-up Wynbox, saying the injection of chance into the online buying process has doubled sales.
Wynbox’s “buy to win” software is based on the belief that online shoppers will be more excited by a one-in-five chance of getting their chosen product for free, than they will be by a 20 per cent discount.
The Rydges trial campaign invites buyers to buy a night at Rydges Sydney Airport using a “book to win” button on the website, which gives a one-in-five chance of paying nothing.
“Everyone loves winning,” says Wynbox co-founder and chief executive Damien Cantelo. “So by giving customers or guests a chance to win, it’s a far more compelling proposition than just a discount or another type of sales promotion.”
Tish Nyar, general manager of Rydges Sydney Airport, extended the campaign by an additional week due to its success.
“The initial results from the Wynbox campaign have exceeded our expectations, with over double the number of bookings,” Nyar says.
Wynbox, previously called Wyngle, launched mid last year and closed an investment round in September with Dominic O’Hanlon, formerly chief strategy officer at MYOB, who is now Wynbox’s chairman. Software entrepreneur Daniel Harrison has also joined as chief technology officer. The name was changed to Wynbox because Americans negatively associated the original name Wyngle with ‘wangle’.
Wynbox charges an upfront fee and a 2.8 per cent transaction fee to retailers which use its software.
Cantelo, who co-founded the business with Sebastian Langton, says online retailers are finding discount offers unsustainable because consumers are reluctant to pay full price again when the discount period is over. The discounted price tends to linger online even after the campaign is over, potentially damaging the brand’s value.
Prizes and competitions are nothing new in retail, but Cantelo says the “buy to win” concept, part of a trend towards “gamification” of online retail facilitated by changing technology, is different to traditional competitions. The buyers don’t have to sign up – only buy the product in the normal way. They win instantly rather than waiting weeks or months for a draw. They are choosing the product they want, rather than going in the draw to win a prize that might not suit their needs. And they have a very high chance of winning.
“The one in five chance to win sounds amazing, but it’s the equivalent of a 20 per cent discount; it’s not that difficult to offer,” Cantelo says. “That’s a commonplace discount, but when it’s presented as buy to win it’s significantly more attractive to the customer. Existing retail margins are used to create free items.”
“Specifically with Rydges they save on paying commissions to online travel agencies because it’s done directly through their website. They have just shifted the commissions they were offering to other websites.”
But Cantelo admits some difficulties could emerge if retailers attempt to split-test the buy-to-win model with discounting, to see which works best. Consumers would be put off if they saw a higher price tag attached to the buy-to-win button.
“It’s very important that we have fair market prices,” Cantelo says. “If the consumer feels they are paying a premium it loses its appeal. Over time some retailers may look to do that, to split-test that. But the real value we offer is to offer it as an alternative to discounting.”