Receipt Data Bridges Gap for Retailers, Banks

A common definition of loyalty is “a strong feeling of support or allegiance.” It’s an apt description of what businesses seek to gain from investments in loyalty programs, but many miss the mark and fail to garner stronger consumer affinity — often due to a lack of granular transactional insights that can provide actionable intel and in turn power better programs.

Optimally, loyalty programs trigger an emotion — “they know me, they value me” — and those feelings can be monetized with the right approach and data to back it up.

Moving consumers beyond basic points and modest discounts into deeper relationships built on value and trust requires a combination of factors, and SKU-level data is a missing puzzle piece.

As Jehan Luth, CEO of Banyan, told PYMNTS’ Karen Webster, “The definition of loyalty is changing. As consumers, we have … a lot of choice.” How and why should a consumer choose a certain retailer to be loyal to, he added.

“It is often an emotional decision. Sometimes it’s rooted in trust in the brand, sometimes it’s rooted in value. Especially now with inflation, for a lot of people it’s rooted in the best price they can get. It is a fluid construct.

Fluid in some ways, but less so in others. Webster pointed out that consumers are swimming in loyalty programs to which they feel little affective connection for lack of true personalization.

That becomes a Catch-22 for retailers who have a wealth of SKU-level receipt data and the banks, financial institutions (FIs) and issuers that control the payments part. They’re not connected.

Luth said, “Retailers and banks, especially the ones we’re working with over the last year or so, have acknowledged the limitations” in this area.

Cardholders shop, but as a bank, “you still have no idea of ​​the items they’re purchasing,” he said. “You can’t be a part of the loyalty stack because you don’t have the SKU-level data, and you can’t build experiences off that.”

Retailers have their own related issue in that loyalty tends to be forgotten the moment a consumer leaves the store or site, often with little ongoing engagement to lock in the love.

“The banks and FinTechs that are with you in your mobile app at: [all times]along with the retailers where you have very deep relationships and where they know the items you’re purchasing and can incentivize you with other items — bringing these two worlds together ends up being … one of those rare moments where incentives are aligned across the board,” he said.

Banyan makes this happen by partnering with merchants who have item-level receipt data and securely sharing it with banks and FIs through its application programming interface (API) and other secure data environments, enabling the creation of tailored loyalty experiences.

“Rather than a retailer trying to get everyone to download their app, which we’ve seen doesn’t work, or a bank rolling out a loyalty program… without the SKU-level data, which we’ve seen that doesn’t work either,” he said the future of loyalty requires bridging the bank’s view with merchants’ to build programs closely matching the consumer’s definition of loyalty.

See also:: Pertinent Data Can Drive Improved Card-Linked Offers

Alignment and Trust

Asked what it takes to unlock the loyalty companies envision but often don’t get, Luth said data is the food loyalty lives on. The new personalization calls for historical transaction data that suggests what kind of program should be offered to whom, and “SKU data is the Holy Grail.”

“It is really taking that loyalty experience outside of the four walls of the retailer and being able to engage a customer by the retailer in your banking app, in your FinTech app, and not keeping it very focused on just owned and operated properties,” he said.

The solution is an alignment of trust and incentives, so merchants and banks can both create better offers by leveraging insights provided by SKU-level data.

“There’s often in the past been a good amount of organizations that used receipt data, but the merchant was never involved. That does not benefit the merchant. That’ll never get merchant participation at scale because it’s sometimes combative and competitive,” Luth said.

Banyan’s approach is infrastructure-first, he explained. “We are not an ads company, we’re not a loyalty company, so we don’t have a vested interest in what is presented to the consumer.”

Rather, Banyan has a vested interest in unifying the efforts of merchants and banks. Banyan stays out of the content part.

“That’s not how we make our money,” he said. “I think just having a very different business model that’s rooted in being first party, end to end — this is directly the merchant and the bank, there’s no one else involved in this pipe — it’s quite powerful.”

Illustrating with a personal example, Luth told Webster about purchasing a child’s car seat that was later recalled for safety reasons.

“If only I was notified by the retailer I purchased that car seat from … where I have a child sitting has a recall on it, that is a really powerful and important thing to notify the consumer about. But today that doesn’t happen unless you’re in the loyalty program at the retailer, or because the bank doesn’t have your SKU-level data.”

Put another way, loyalty is far more than points and deals.

“We have to build the ecosystem in a way where the merchant also benefits from running campaigns with banks. Loyalty for some people isn’t about offers,” he said. “It’s about an experience they can get. It’s about trust.”

See also:: How Banks and Merchants Are Working Together to Design Better Loyalty Programs

A Three-Sided Opportunity

That moves the goalpost somewhat on what a loyalty program should do in 2022 and beyond, but that’s part of the original point about definitions changing for the digital-first consumer.

For Banyan’s part, Luth said loyalty means different things to different people.

“If you’re a business cardholder traveling, you’re going to spend money differently and you’re going to have loyalty to different brands than if you’re a small business owner running a restaurant or a kid in college. It’s being able to build an ecosystem and a set of solutions that’s not geared just toward offers, but geared toward what’s best for the consumer.”

What loyalty is in a digitally connected economy can also change with external factors, and programs using SKU-level data are adaptable to shifts in consumer sentiment.

He said, “I’m sure we all saw on the news recently some really large retailers adjusting earnings expectations … and they’re citing a change in consumer behavior as one of the driving factors.”

That’s a proof point for using SKU-level data to understand changes in consumer sentiment, enabling timely, impactful changes that can be made in response, deepening affinity.

“I think retailers and merchants have an opportunity, banks have an opportunity, to cater to the consumer’s need today, which is going to be a bit different, and it’s going to be rooted around savings rather than what it was maybe 12 months ago. “



About: The findings in PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed the responses from 9,904 consumers in Australia, Germany, the UK and the US and showed strong demand for a single multifunctional super apps rather than using dozens of individuals ones.

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