It’s not easy to be a marketer. The world has changed dramatically since the onset of the pandemic. E-commerce has grown, and so has buy online, pickup in-store (BOPIS). In-restaurant dining has fallen and grocery delivery has soared. Cash is no longer king as the use of cards and payment apps exceeded even the most optimistic of forecasts. Consumers in the past year simply haven’t behaved the way they once did, which makes it difficult to anticipate their wants and needs.
Complicating matters for marketers this year is that some, but not all, of the ways consumers behaved during the pandemic are changing again. As the coronavirus has eased in much of the country, some shopping patterns are returning while some newer behaviors, such as buying food and beverages, inclusive of alcohol, online; ordering meals for delivery; and subscribing to wine clubs and meal kit services, seem to be here to stay. Understanding the nature and degree of these shifts is key if a marketer is to succeed.
How payment data can help unlock blind spots in the customer journey
Payment data can provide the level of insight into consumer shopping patterns that marketers need, now and into the future. However, it’s important to note that not all payment data is of equal value, and it can be challenging to access the in-house data science, research, and analytics resources needed to separate the wheat from the chaff. In this field guide, we’ll discuss some of the types of data that marketers can choose from and how to evaluate a data source.
Who, what, when, and where
Many digital consumer signals are in decline.
- Following the GDPR in Europe, California and other states introduced privacy regulations designed to prioritize notice and choice, inviting consumers to opt out of the sharing of data about them
- Some of the world’s largest tech companies are limiting the data they collect and share from mobile devices to enhance consumer privacy; updates to Apple’s App Tracking Transparency (ATT) are a prime example
By comparison, the data available from card transactions remains available to marketers. This chart highlights some of the key differences between payment data and location data.
Payment data has grown more useful since the pandemic began. The drop-off in the use of cash has made for deeper and more useful data from card purchases. Card spending grew in 2020, despite a consumer spending decline due to the pandemic. Our category spend tracker shows card spending is up more than 22% year-to-date in 2021.
But marketers who want to use card transaction data need to carefully appraise the sources and nature of that data. The payment world is a complex web of multiple companies operating across the globe. Card transaction data is compiled by issuing banks, card networks, acquiring banks, bank data partners, consumer panels, loyalty cards, receipt scanners, and more. Money is routed through a financial network filled with providers and processors, and data is collected at nearly every step.
Data from each of those steps comes with advantages and disadvantages for the marketer seeking insights. Issuing banks have broad data. Acquiring banks have deep data. Consumer panels have depth, but the accuracy of consumer-reported behavior is not assured. Loyalty cards may offer product-level data, but they are limited mostly to CPG.
How to evaluate payment data
As a marketer considers which purchase data to use, they should first ask three core questions.
How big is the data set? Is it representative of your customers? Is it reliable? The answers to those questions aren’t difficult to find. Most providers are transparent about what they can and cannot do, and there are many reputable companies offering data to marketers. But that’s only half the battle. There are other important questions worth posing.
- Does the data source include credit and debit cards?
- What percentage of U.S. card transactions are included in the product under consideration?
- Is spending by the same individual on two different cards treated as one ID or two?
- Is the data available on an individual or household level?
- Finally, marketers should ask what is the latency on data becoming available?
Old shopping patterns are gone. So too are some of the new shopping patterns of the pandemic. Data from card transactions offer extraordinary levels of insight into how consumers are behaving now.
Marketers are in a difficult place, and their need for useful and usable data has never been greater. Marketers need to choose wisely when considering the data sets available to them. Asking the right questions of any vendor offering card transaction data is the key to success.
Nick Mangiapane is CMO and Partnership Lead for Commerce Signals, a Verisk financial business that helps marketers grow sales and eliminate waste using payment data-based insights, audiences, and measurement.
