Will Pepsi’s new rewards program make an impact in the CPG space?

     You may have recently noticed a small change to your favorite PepsiCo drinks and snacks. A small white patch began appearing in early 2020 on products inviting purchasers to sign up for PepCoin. What is that? It is Pepsi’s brand-new rewards program where you can earn 10% cash back when you purchase one Pepsi drink or one snack. Customers just need to scan the label of each purchased product into an app to earn the rewards and then can easily cash-out via Venmo or PayPal.

    At the surface level this sounds like a win-win for consumers and Pepsi. Consumers are given a strong 10% discount on purchases that is easily convertible to cash. Pepsi gains customer purchasing data and build product loyalty. There also remains the possibility to send additional target coupons through the app based on the obtained customer location and purchase data (though this is not happening now). What remains unclear is whether customers are willing and will remember to submit receipts through Pepsi’s app. The customers that Pepsi gains data on may be the most price-conscious, limiting opportunities to squeeze them for additional revenue. Barring data from Pepsi we can only conclude that this is an experiment that could be widened or scrapped based on participation and results. At 10% back, this has the potential to be an expensive experiment. Perhaps Covid-19 will allow this experiment to succeed and tighten Pepsi’s bonds with their end customers – only time will tell.