Russians forewent their summer holiday this year and bought a new smart phone instead, taking advantage of new cashback promotions, telecoms major MTS said in a blog on October 25, citing a survey by the Russia Public Opinion Research Centre (VCIOM). 

The survey found that 78% of respondents took summer leave this year, but only 31% of them travelled to another city or country, MTS reports.

The rest went to the dacha or stayed home and used the money they saved to update their smart phone to a newer model.

“Russian consumers prefer spending their saved money on new smartphones in order to enjoy digital entertainment such as YouTube, online gaming, social networks and messengers which often replace offline entertainment,” MTS said.

Within MTS Retail, which handles handset sales for the telecoms major, sales were “explosive”, as a result of replacing various loyalty discounts and bonuses by a cashback programme. These rebate and cashback programmes have become popular in the last year and have been increasingly used by retailers to support retail sales.

“The cashback encouraged consumers to update their smartphones. Another trend of the third quarter of 2018 was that Russian consumers spent less on travel this summer and preferred to make expensive purchases, including devices,” MTS said. “Due to changes in consumer behaviour, there was no traditional decline in sales this summer. On the contrary, sales within MTS Retail showed record numbers in the reporting period.”

Russian mobile operator MegaFon has recently launched a personalised big data analysis based bonus and discount application that includes cashback schemes. Cashback as a sales tool has been pioneered by EdaDeal, run by Natalia Shagarina that is a website for busy mums to help them make the most of their household budgets, which was recently acquired by Russian internet giant Yandex.

“Cashback became the most efficient tool to attract customers and replace traditional discounts and bonuses,” MTS reports. In the third quarter of 2018, 52% of smartphones within MTS Retail were bought via the cashback programme. The share of such smartphones almost doubled compared to the second quarter of 2018. These numbers show that customers prefer immediate cashback to discount options and bonuses that are often related to certain retail chains.