CPG Brands Rank Checkout as Top Promotions Priority, but Budgets Lag

Fifty two percent of CPG brands and manufacturers say an embedded, automatic smart tool at checkout would most improve their promotional capabilities, according to a new PYMNTS Intelligence report, “The Smart Checkout Opportunity: Why Brands are Ready to Fund a Smarter Checkout Ecosystem,” produced in collaboration with FIS. Smart checkout edged out real-time redemption visibility, cited by 51%, as well as richer shopper level transaction data and artificial intelligence (AI)-driven offer targeting, each at 46%.

Yet only 13% of brands expect embedded real-time checkout to receive their largest promotional budget increase over the next three years. Retail media networks lead at 30%, followed by AI or large language model shopping interfaces at 27%.

The gap creates an opening for payments providers. Brands are identifying checkout as a missing promotional capability before they have created a corresponding budget line for it. Providers that already connect merchants, issuers and transactions can make the case for checkout infrastructure as a way to put existing promotional dollars to work closer to the purchase.

Checkout Already Has Brand Traction

Nearly half of brands surveyed, at 49%, used checkout integrated promotions during the previous 12 months. While that trails retailer websites and apps at 67%, in-store placements at 62% and retail media platforms at 57%, checkout performs comparatively well when brands identify their most successful acquisition and growth channels.

Seventeen percent rank checkout integrated promotions as their most successful channel, tying in store promotions and trailing only brand-owned digital or CRM at 19%. Retailer websites and apps, despite their much wider use, are cited as most successful by 14%.

We’d love to be your preferred source for news.

Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

Add as Preferred Source

Smart checkout gives payments companies a way to build on a channel brands already use rather than asking them to fund an entirely new promotional model.

The infrastructure requirement is significant. Smart checkout evaluates the products in a basket and automatically identifies and applies eligible product level offers, loyalty rewards and brand funded incentives at the transaction.

Brand interest alone won’t move promotional budgets.

CPG companies are explicit about what they would require before participating. Sixty percent cite a defined governance structure, 57% want minimal operational burden and 49% require clear financial responsibility among participants. Another 48% want defined retailer implementation standards.

Measurement may be equally important to converting interest into spending. Fifty-nine percent want visibility into incremental sales as a guardrail for participation, while 56% want fraud and misuse safeguards and 51% want the ability to opt in or out by SKU, category or retailer.

For payments providers, the opportunity is therefore larger than processing the offer. Infrastructure that can connect basket level eligibility, automatic redemption, transaction data and measurement could give brands a clearer basis for deciding whether checkout deserves a larger share of promotional spending.

The report’s 52% finding suggests the demand is already there.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.