Item-Level Data Gets Ready to Remake Loyalty and Personal Financial Management

Item-level data is poised to bring a new level of impact and relevance to card-linked offers.

The status quo of listing purchases as “general merchandise” is getting a reboot with SKU-level data that gives a far better portrait of the consumer to retailers, enabling more specificity in offers and opening new vistas in rewards and loyalty long reliant on cash back.

“I think card-linked offers have been a rather blunt instrument in a retailer’s marketing toolkit,” said Jehan Luth, CEO of FinTech Banyan, telling PYMNTS’ Karen Webster that “one of the biggest reasons it’s a blunt instrument is because as a retailer, I cannot drive traffic to certain items.”

Rather than running “10% off everything” offers, or worse, something irrelevant to the consumer, Luth said “the overlaying of SKU-level data or item-level data in rewards and offers makes card-linked offers a much more versatile and powerful tool in the toolkit for retailers. Now I can drive traffic to certain categories within the store, or certain items within a store.”

It works when the economy’s booming like it was in 2021, and it works when the economy is tanking like it is in 2022. With inflation eating paychecks whole, Luth said “especially in the category of everyday spend — grocery, drug, convenience stores — that’s really where consumers are looking to save.”

However, those merchants “have historically been the least participatory in card-linked offers because of the lack of SKU data.”

With people cutting back and looking to save on household essentials, he said the timing is propitious “to bring these kinds of merchants into the card-linked offer models, and that drives meaningful savings to the end consumer. It’s beneficial to all parties.”

This is borne out by recent research. The study “Tapping Into The Benefits Of Item-Level Receipt Data,” a PYMNTS and Banyan collaboration, found that “nearly half of firms are highly interested in using receipt data to improve consumers’ understanding of their own spending behavior. This increases to nearly 80% among firms with high data readiness.”

Get the study: Tapping Into The Benefits Of Item-Level Receipt Data

Top of Wallet Dreams Made Real

Where this trend gets truly interesting is the potential for banks and financial institutions (FIs) to bring SKU-level data into digital statements inside banking apps.

Observing that offers for premium cards and rewards lean towards large travel purchases or things like big-ticket electronics, Luth noted that this type of spend is sporadic, and the real opportunity for top-of-wallet status is relevant card-linked offers on everyday goods.

“The banks need to start investing more in driving habituation on everyday spend,” he said. “That’s where these two worlds are colliding. It is very meaningful for the retailer.”

For banks, driving habituation on everyday spend can be a big win: “That’s when the card gets top of wallet. That’s the dream for most banks, is to be the topmost cards in a consumer’s wallet.”

Most aren’t there yet. Harking back to the problem with “general merchandise” showing up on a statement, Luth said “[Merchant Category Codes] is not how people budget. It’s not how people reconcile their finances. Items are really important when we start looking at the personal finance space. We believe the future of personal finance management is at the item level. It’s nearly impossible to do so” without item-level data.

It’s also one of the biggest missed opportunities in retail or banking. Noting that large merchants online and off sell tens of thousands of SKUs and items within stores and ecosystems, he said, “They might know me as a pet shopper, a childcare product shopper, etc.” Crafting “sub-experiences” for each of these personas is far more likely to yield results.

Read more: Item-Level Data Network Banyan Gets $43M to Power Next FinTech Wave

Crafting Offers for All Versions of You

The holidays can throw a wrench in the works in terms of matching offers to shoppers because during winter gifting season, people aren’t generally purchasing for themselves.

“It’s very hard for banks and institutions to know that this is because you’re buying something for yourself, something for your house, or something as a gift,” Luth said. “That’s really where item-level data can answer the question and close the loop on atypical transactions.”

At such times, item-level data empowers bank apps — the one app everyone has on their mobile phone — to serve up relevant card-linked offers, drastically increasing value to all.

“You likely do have the apps of your bank on your phone. How do we bring these worlds together where the retailers and the banks are working together to serve their customers? That’s something we’ll start to see in a big way next year,” Luth said.

The beauty of that arrangement is that banks and retailers aren’t chasing the same customer with the same products, which makes SKU-level data cooperation mutually beneficial.

Noting that Banyan is building a digital infrastructure for next-generation experiences, Luth said: “I remain very bullish and excited about what FinTech infrastructure can bring to the ecosystem where banks don’t have to build something from scratch. Rather, they can plug into something to solve a pain point. Same thing with the retailers.”