Consumer data is being widely spoken about in the fintech industry, especially as data personalization and transparency are significant to financial data ecosystems. As a fintech founder, I have been particularly fascinated by consumer retail trends appearing from transactional data that could rapidly improve user experience and targeted marketing in-store.
The best value proposition is to combine payment and location-based data that customers opt into sharing. Then, retailers and merchants can design automated marketing campaigns around customer usage. Online, there is already a suite of tools to deliver first-rate customer experiences and sanitize data to find out what is relevant. Now, it is time to bridge the digital and offline worlds – e-commerce insights with physical statistics – to help in-store shops gain similar levels of insight.
There are many data points in e-commerce operations, from cart abandonment to bounce rate, and there are numerous ways to clean this data. But merchants and retailers in-store should also aspire to cut down on the noise about irrelevant data to make sense of data points, change them into useful insights, and generate growth.
Currently, the data harnessed from consumers walking into stores is collected via public WiFI networks, applications, and cookies. This information is then often sent to third-party advertisers who generate ads over Facebook or Instagram. Merchants and retailers, therefore, receive data that essentially says: Everyone who came in today had red shorts on. What can they do with that information?
On the high street, you would have heard about heat sensors and optical scanners, and many other metrics attempting to collate actionable insights. But what about something more simple?
I’m talking about honing in on transactional data – the most powerful data to understand who people are, what they are purchasing, where they live, whether they walk or drive, and their socioeconomic status. This information has been locked up, but get prepared to see a merger between offline and online shopping.
The fact is, retail stores aren’t going anywhere, but they are minimizing inventory and turning to showrooms or pop-up shops. Even large-scale companies like Tesla have smaller-scale retail stores with limited physical inventory. And if the number of merchant and customer interactions will drop dramatically, stores should be doing everything they can to make them count.
Currently, if a company chooses to send a coupon or an email ad, there’s no way of working out how effective it is, and marketers can’t currently serve up real-time data in-store. However, there are companies looking to marry existing payment technologies, Bluetooth, transactional data, and location-based statistics – that customers opt into – to boost retailer customer retention.
At my company, a fintech company empowering merchants to accept touchless payments via Bluetooth and making payment services accessible for all, we are teaming up with merchants to produce a type of right-time, right-place marketing, all while avoiding sharing information with third parties.
As Data Management, marketing, or fintech professionals, we must all work towards a common goal: to put the control of consumer data back into their hands so they decide how they want to be monetized.
Through data orchestration and an analysis of buying patterns, merchants can design automated marketing campaigns and real-time promotions. They’ll be able to see what time customers come in, how many times they enter the store, what they like to buy, where they stand, and their average spend. And if they didn’t buy anything, why not?
With this kind of data, shops will know to change the floor plan, anticipate busy periods, and introduce more self-check-out opportunities, for example.
Bluetooth is also beneficial for profiling customers and informing business decisions, since it doesn’t have to connect to a network, and customers have to opt in to share information or get coupons, benefits, and discounts.
The idea is to build infrastructure and a data stack so that a data platform can open up APIs for merchants and retailers to build on, allowing for automatic advertising and push notifications. Being able to thank people for being loyal customers will boost customer retention and experience simultaneously.
Instead of using third-party data to bring in new clients, it is much more profitable for merchants or retailers to monetize existing customers. For example, it is pointless to send a push notification with a 50% discount at Safeway to a customer who just walked into Safeway’s competitor.
Imagine, instead, entering a store and receiving this SMS pop-up: “Emily, thank you for being a valued customer, here’s three pounds off our top-range smoothies.” Would you go and buy that smoothie to get the deal? Through this targeted offer, there’s a high possibility.
In this case, no data needs to be shared with anyone other than the merchant or retailer. This enables brick-and-mortar stores to use real-time data to send right-time, right-place advertisements or loyalty points, and see the effectiveness of that marketing campaign straight away.
Anonymizing this data is key to empowering the customer further. As customers move to a digital-first purchasing behavior, anonymizing their data helps them maintain their data privacy while still giving merchants insights into delivering a great retail experience. Apart from that, it creates a critical buffer for security breaches for the retailers, as they no longer have the burden to store all of this information securely, and customers don’t have to worry about their information being exposed from a third-party hack.
For instance, if the retailer knows that user 197997 comes in twice a week at the same time to buy diapers from a particular brand, there’s already enough data in those habits to deliver targeted marketing around baby wipes, bottles, pacifiers, and other ancillary child care products, all without the need to know sensitive personal information of the customer.
Then, the continuous debates about privacy and security can be broken down into two perspectives. Merchants and retailers must ask themselves: How invasive do they need to be to get the effectiveness that they want? For customers, the question is: How much of themselves do they need to share to get the experience they crave? Customers will have to weigh this up in the future. If they don’t share their phone number, maybe they’ll miss out on real-time deals or messages.
In contrast to what has been happening until now, customer data empowerment is a much more promising scenario. The mindset in 2021 is still “give us all your information, we’ll sell that to third parties, and figure out what is important afterward.” Alternatively, merchants and retailers leveraging transactional and location-based data put the control back in the hands of the customers, while delivering effective in-store marketing.