As we gear up for the busy holiday shopping season, many retailers are looking for ways to reach, engage and convert every potential shopper so that both physical and virtual cash registers are ringing, all the way into 2013. In our digital world where the enormous number of transactions are faceless, businesses are eager to find ways to learn more about their customers’ interests, brand loyalties and lifestyles. It turns out the answer could be right under their noses, whether they sell Red Sox gear or priceless gems.
And what would that magic bullet be? It’s called payments data – data that is rooted in every credit or debit card transaction that holds information about consumers and the payment choices (and purchasing habits) they make. For example, the card type a customer uses reveals a lot about that person. Just knowing whether he or she is using an American Express or a store card can reveal their level of affluence or degree of loyalty to a brand or store. The card type can also tell businesses about a consumer’s geographic location. More broadly, payments data can reveal more about trends their customers are exhibiting: are many using prepaid Visa cards? Or is MasterCard your customers’ preferred choice of payment method? Data gathered through payments may actually reveal that they’re most likely to be in the Midwest than in Massachusetts. This information can be overlaid with other data points and interpreted by any retailer or business to fine-tune campaigns and offers for maximum holiday success.
Even as Boston has been a hive of innovation on the mobile payments front, mobile is still young in consumers’ minds. So, as our holiday gift to Boston businesses, we’ve laid out the path to payments intelligence. In October we surveyed 500 consumers on their payment preferences for the holidays, and some of their answers may surprise you. For example, all that talk about the popularity of mobile payments? It may be just a bunch of hot air: turns out that only 8.6 percent of shoppers with smartphones think mobile wallets are going to change the payment world, and 71 percent report having never even used a retailer’s mobile swipe service (such as Square). According to our survey, most customers will be using debit this year, making sure they don’t overspend on gifts and celebrations.
Still, the value of payments and the payments data you have at your fingertips goes well beyond the 2012 holiday shopping season. The payments engine of the future will be filled with intelligence that allows businesses to calculate customer lifetime value, predict the propensity of a customer to make the next purchase, and even personalize offers to individual customers.
Payments intelligence is becoming more important as the traditional provision of payments services continues to be disrupted. While much of the data involved in payments intelligence has been available for years, a new generation of app-driven SaaS developers and systems is beginning to approach transaction processing with a new mindset – one where intelligence drives action.
Gathering payments data and turning it into actionable payments intelligence is easier than it sounds. Every retailer or service provider that processes payments is sitting on valuable data, if they know where to look and what questions to ask. Simple inquiries such as “Is this a repeat customer?” and “What card brand does this customer use?” can reveal more than one might think and can help businesses gain fluency in payments intelligence.
So to merchants from Newbury Street to the Wrentham Outlets, we say take a look at what payment data can do for your business. The potential impact is something you don’t want to pass up.
Ben Saren is Vice President of Marketing for Litle & Co., the payment processing and intelligence engine behind leading e-commerce and consumer-direct brands, including Overstock.com, Ancestry.com, Gilt Groupe, Guthy-Renker, ShopNBC and Wayfair.com.
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