Wesfarmers has inked a deal with Ebay Australia that will see its Flybuys loyalty program extended to purchases made on the marketplace.

As of today, Ebay shoppers can collect and redeem Flybuys points with 40,000 Australian retailers on the marketplace, earning one point for every $2 spent on eligible items.

The partnership is the biggest expansion in the Flybuys program since the addition of Velocity frequent flyer points in 2016, signalling the growing importance of the program to Wesfarmers in the context of the planned Coles demerger.

For Ebay the deal is its first move into loyalty, representing a significant opportunity to strengthen its customer retention in the lead up to the launch of Amazon Prime in Australia later this year.

The online marketplace estimates that over 60 per cent of Australian households who actively use Flybuys will now also be able to redeem points for Ebay vouchers at a rate of 2,000 points for $10, which they can use to purchase items from the e-commerce company’s 1.1 billion global listings.

Julie Nestor, Ebay Australia’s chief marketing officer, said Ebay had originally approached Flybuys with the idea for the partnership and described the deal as a no-brainer.

“We’re thrilled to partner with Australia’s most popular loyalty rewards program as part of our mission to continue innovating and transforming the retail industry,” Nestor told Inside Retail.

The details of the partnership remain confidential and Ebay would not be drawn on the specifics, but it comes as Wesfarmers pushes to better leverage its digital and data capabilities.

In February, Wesfarmers group managing director Rob Scott announced the creation of a new data unit within the retail conglomerate, to pursue a variety of projects across its business units, as its rival Woolworths steps up its own efforts.

Wesfarmers will retain ownership of Flybuys in the Coles demerger, a move that was flagged by Scott in March as a strategic boon.

Ebay said the partnership will help smaller retailers on the platform gain access to a widely recognised loyalty program, which they likely would not be able to do on an individual basis.

Citing a survey conducted with 1,570 sellers in April, Ebay said 62 per cent of small retailers believe a rewards program would help their business compete with larger players, while 71 per cent believe a loyalty program would be too expensive to set up and run.

You can read more about the partnership in this week’s edition of Inside Retail Weekly, out tomorrow.

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