Merchant Innovation

How Synchrony Leverages Analytics For Their Retail Partners

So what does a $12 billion credit card firm do after signing off from its massive parent (GE)?

Well, if that firm is Synchrony Financial, it plans to launch an analytics-based pricing tool for customers.

The “Next Best Offer” project aims to treat customers as individuals by analyzing data about an individual's shopping habits and then using that data to present relevant discount or loyalty offers to the retailer. The goal, says Greg Simpson, Synchrony's CTO, is to make it easier for the merchants to ultimately seal the deal.

“A big part of our value proposition for merchants is to help increase sales in their stores, so they want to use us for their private-label credit card," Simpson told The Wall Street Journal.

Simpson is somewhat unusual in his role as a decision maker when it comes to reeling in the consumers. The Wall Street Journal reports that traditionally CIOs and CTOs find themselves more commonly in the role of executing marketing and sales plans devised by other members of the executive leadership team.

But that may be changing, noted Greg Buzek, principal at IHL Group, a retail technology consultant, as tech executives are getting a more central seat at the planning table.

“Great CIOs are the ones who can grasp the revenue generation opportunities, rather than thinking only as a cost-reduction center,” Buzek said.

Back over at Synchrony, the firm (under Simpson's leadership) has opened an analytics innovation lab in Chicago recently and the Next Best Offer work is a key piece of its agenda. Synchrony last week started to set up Hadoop in Chicago. Hadoop is an open source platform for analytics used by such major players as Google Inc. and FICO.

"[Hadoop works with] more complex data, from more diverse sources, and does near real-time analysis,” Simpson said, noting that the platform is tailored to deal with petabytes of consumer data. That ability to shift between so much data is going to be key since Synchrony’s files provide 3,500 individual data points, such as balance, payments and merchandise purchased for each consumer in the system. In addition, the company analyzes about 300 behavioral attributes, such as shopping frequency and where consumers buy versus browse.

“You swipe one of our cards, we collect a lot of data,” Simpson noted.

The system will consider a consumer’s shopping history — meaning more loyal shoppers could see special, limited-time pricing. The service also keeps track of competitor pricing.

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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