Final answer:
Hibbett Sports' reward scheme is a customer loyalty program that aims to increase customer retention by offering perceived 'good deals,' which can result in consumer surplus.
Step-by-step explanation:
Hibbett Sports' reward scheme is a customer loyalty program that aims to increase customer retention by offering perceived 'good deals,' which can result in consumer surplus.Hibbett Sports offers a reward card that gives customers coupons and incentives for store purchases that they can redeem for additional merchandise. This is an example of a customer loyalty program. When we talk about a shopper getting a "good deal" on a product, from an economic perspective, this may involve the concept of consumer surplus.
This is when the price that consumers actually pay is less than what they are willing to pay, meaning they feel they have received more value than the cost of the product. These programs are designed to increase customer retention by offering rewards which are essentially perceived as 'good deals.'