Item-Level Data Helps Banks Stay Top of Wallet

At the intersection of digital channels and inflationary pressures, consumers are demanding more value from merchants.

And it’s not all about price.

Banyan CEO Jehan Luth said the great digital shift has shifted the definition of “value,” and merchants need to offer a better value proposition while consumers are browsing and shopping in virtual and brick-and-mortar aisles — or risk losing the sale. Item-level data can help seal the deal.

Moving Beyond Price

Although consumers are still showing a propensity to spend, merchants are facing several challenges as they joust for consumers’ top of mind and wallet share, Luth said. The rise of platforms and aggregators has given shoppers an ever-expanding range of options to choose from. Consider the example of grocers, where the platform model (Instacart, to name one option) lets individuals order from grocers they wouldn’t be able to drive to — and have goods delivered to their doorstep.

As Luth told Webster: “It’s not just about [driving] radius anymore.”

The aggregators have also consolidated the broad range of merchants into one central location, so consumers need not juggle their way through several apps to find what they want.

“For the merchants, it’s tougher than ever to get their apps to the ‘top’ of the digital shopping journey,” Luth said.

There are some tools at merchants’ disposal that can be instruments through which to deliver value — if only they would use them effectively, he said. Co-branded cards, for instance, have been good conduits for value, especially in the travel vertical.

Turbocharging Co-Branded Cards and Card-Linked Offers

“But if you look at the co-branded cards geared toward everyday spend, you can, in many cases, get better rewards from your general, regular purpose card,” Luth said. “That’s a lost opportunity in so many ways.”

Merchants must already bear the cost of payment acceptance, and in low-margin businesses, delivering value through co-branded cards can boost results — targeting consumers in a digital world where offers are relevant to what they’re buying at the moment or what they’ve purchased before, he said.

It’s the banking and the FinTech app that can be the gateway to gaining access to the receipt-level and stock-keeping unit (SKU) data that becomes, in Luth’s telling of it, “an extension of the merchant’s marketing team. It’s been a missing part of the puzzle” that brings financial institutions and merchants together to meet consumers and offer rewards that take context into account.

With that granular detail, said Luth, co-branded cards can transcend the typical rewards that have been offered to consumers.

“With item level data, you could have double points on private-label goods at that retailer or triple points on certain categories or four times points on certain brands,” he said. “There’s so many more things that are possible when this ingredient is added.”

The result is that merchants enjoy the benefit of engaging with their consumers through the app they have on their phones in ways that create a stickier relationship, he said.

There’s a technical challenge in the mix though. Banks have been grappling with legacy systems that have been implemented over several decades. Platforms such as Banyan’s enable retailers and issuers to harness item-level receipt data to craft promotions and offers that go well beyond the confines of price.

The connected ecosystem leverages the banking ecosystem to drive loyalty — to get the credit/debit card and the merchant top of wallet with tried and trusted payments rails amplifying the trust that consumers have placed with their FIs.

“Item-level data is almost like a Swiss army knife on the merchant’s toolkit to power new experiences” as they improve card-linked offers, Luth said.

As recently April, Banyan partnered with Triple to enable item-level card-linked offers driven by SKU data. Looking ahead, Luth said, such collaborations can foster “embedded rewards” on core merchant brands by taking existing products and services and gleaning insight from the item-level data housed within them.

As he told Webster about the value-add presented by personalized offers, “we’re at the point where merchants are seeing it, consumers are expecting it … and banks are looking for newer ways of engaging with their customers.”