eBucks launches 'highest unique bid' loyalty auction
The South African coalition loyalty programme, eBucks, has announced the launch of a new 'highest unique bid' auction service that allows members to use their points to bid in auctions.
The eBucks auction model differs from the traditional online auction - in which the highest bidder wins - thanks to its highest unique bid feature. eBucks members now have the chance to use small amounts of their eBucks to bid for a product, and the successful bidder will usually get it for a fraction of the usual retail price.
In keeping with the 'Greatest Rewards on Earth' theme of the Space competition that eBucks and FNB ran in 2005, in which the programme gave away a sub-orbital space trip, eBucks has launched the auction with a once-in-a-lifetime Ferrari experience in Italy, ending with VIP entrance to the Monaco Formula One Grand Prix.
How the auction works The highest unique bid auction is not new to South Africa and is also widely used internationally. It differs from a typical auction in that it is not the highest bidder who wins, but the one who makes the highest unique bid, closest to the maximum ceiling price. An item retailing for R1400 would have a maximum bid price of about R100 so only bids below this price will be accepted.
A nominal administration fee will be charged for participation in the auction and the number of bids per auction is limited. The number of bids per person in the auction is also limited. The successful bidder will be able to purchase the product for not more than R100, while all other bidders will have spent only a small amount of the eBucks that they have received free from their rewards programme.
Rewarding everyone eBucks, which has First National Bank (FNB) as its key partner, is part of the FirstRand group, although it is a true multi-partner programme through which companies can give eBucks to their customers as loyalty rewards. Consumers then have a variety of ways to redeem their eBucks points.
According to Lezanne Human, CEO for eBucks, "We constantly re-evaluate our programme and wanted to address the fact that some of our active members have low balances. In response we adopted a model that allows members to participate in an exciting auction process where they need skill to acquire the product, yet are guaranteed that they won't be drawn into paying a higher and higher price."
High redemption rate Michael Jordaan, CEO for FNB, added: "eBucks has allocated over R600 million worth of eBucks to its members since its launch nearly six years ago and has a very high level of member activity, with over 70% of allocated eBucks being spent monthly. As members use their eBucks, they traditionally look for ways to accelerate the earning of more eBucks, which in turn drives partner profitability."
This new initiative was timed to leverage the phenomenon of accelerated e-commerce growth currently taking place in South Africa, as well as the phenomenal consumer popularity of online auctions internationally.
National online growth Recent reports released by the Online Publishers' Association on the uptake of e-commerce in South Africa, along with international ratings company Nielsen/NetRatings, confirms this dramatic growth. The total combined (local and international) readership on South Africa's top websites has grown from 5,4 million unique browsers in the third quarter of 2005 to 6,7 million in June 20061.
Online retail auctions have furthermore become one of the fastest growing e-commerce phenomena in South Africa in the past two years. According to Arthur Goldstuck of World Wide Worx, in 2003 there were only 13 online action web sites, with this number growing by 230% to 43 in 2005.