Zomato has announced the introduction of the loyalty reward point system for its users, called as Piggybank. The new feature is introduced to incentivize customers to order food via Zomato’s platform online. This is the first of its kind for online food ordering platform to offer a loyalty credit system. While other platforms like Foodpanda and Swiggy run special offers and offer discounts from time to time, Zomato’s loyalty points system may produce great results for the Restaurant Listing Company in terms of customer retention. This is especially true if users can avail a considerable amount of discount on their orders.
How does Piggybank work?
Much like most other cashback offers and loyalty points offer, the Piggybank feature is designed to provide a credit to your account once you make a purchase. For example, if a user places a food order on Zomato for Rs. 500, the user will be credited with 10% of the order value (Rs. 50 in this case) in the form of Z Coins. These Z Coins will be stored and accumulated in the Piggybank in your Zomato account. These Z Coins can then be used to pay off 10% of the next order (i.e. Rs. 50 off on the next bill in this case).
Users can choose to accumulate the Z Coins in their Piggybank and spend them on select orders. Zomato has set 1 Z Coin equivalent to Re. 1, so for every Z Coin that you use on your order, you can save a rupee. This feature isn’t limited even if any other offers, such as cashback, promo codes, etc. are used. In short, Z Coins can be used over and above any special offers and this wouldn’t in any way limit the discount that you receive on your bill.
So how can users avail of this feature?
It looks as though Zomato isn’t rolling out this feature for all users of the app. As of now it is rolling out this feature as an introduction to select users and will only cover 21 cities. The user selection is based on their loyalty history and the availability of partner restaurants in their city/region. This number is just close to 10,000 users on its Android app. However, the Gurgaon based company indicated that it aims to expand the loyalty program and make it open for all of its users who place 5 orders of more every month, in the near future. The company is also in talks with its partners to expand its network to service more Premium customers.
In a blogpost on its website, the company elaborated its plans for the Piggybank services. It aims to make this as a Premium service, on the lines of Amazon Prime and will charge an annual subscription of Rs. 299. This will kick in after two months as an introductory offer. As of now, users can refer members that aren’t eligible to avail the Piggybank service using a referral code. Once the Premium program commences, users won’t be able to make referrals and the only way to use the Piggybank feature is to acquire a subscription. Another Indian online delivery company, namely Faasos, also has an “Elite” membership that is offered to those that make regular orders. However, it hasn’t monetized this service as of now.
Zomato stated that it derives close to 30% of its revenue from online food ordering services in FY 2018 and aims to increase this with the introduction of the Premium subscription model, which will be a new revenue stream.