Today at BIA/Kelsey’s Deals3D conference, Gary Kearns, MasterCard group executive for information services, was all about the data. The volume of purchase data that flows through MasterCard puts it in a unique position to target offers in ways that boosts their relevance (read: performance).
In total, MasterCard has 37 million merchants and 63 billion annual transactions coming through its network. Kearns took the opportunity to boast its data warehouse loads, which are 11 times bigger than YouTube (in bits presumably) and 11 times larger than Amazon (AWS aside).
So to be successful in deals, he highlights five key areas:
1. “Big data and big insights can turn the lights on,” he said. If you don’t have the insight to target customers based on purchase history, you’re operating in the dark. The areas of data that can best empower publishers and merchants are segmentation, targeting (target most high-value customers) and measurement.
2. Business Intelligence: “Are you monitoring online, instore and mobile transaction activity?” he asked. “Do you know what retail sectors and geographies are having biggest transition to online or mobile?” Top days of the year, week month or daypart are all important things to know to optimize deal targeting. Seventeen percent of apparel sales were online in May, for example, and Wednesdays saw the highest volume. This is the type of data you need to examine.
3. “Purchase behavior is the new demographic,” he said. Demographic targeting is no longer relevant when compared with purchase activity. The former is a proxy for the reality that is the latter. Knowing what’s been sold, redeemed, and how often (loyalty) across categories is important in the aggregate and on an individual level. He also stresses that purchases in totality lead to a much richer mosaic of consumer segmentation — not just what they buy from you.
4. “Mobile is the new plastic,” Kearns asserted. By 2014 3 billion people globally will have smartphones or payment enabled phones. The combination of location targeting and purchase behavior will be powerful. But location isn’t enough. I might not get close enough to a store to be targeted, so purchase history augments optimal user targeting. MasterCard is of course one of the launch partners for Google Wallet. When NFC becomes more ubiquitous, all of the above will be unleashed (see our previous coverage).
5. “Are you building scalability in your operation?” he posed. The biggest barrier here is the fragmentation of platforms in the market, which is antithesis to automation and scale. “You need a redemption solution that works for every merchant in your network,” he said.
His bottom line is quite clearly that data is paramount. This is becoming more important with the convergence of mobile, local and social. That makes it very opportune in addition to challenging (disparate data sources, etc.). Grounding it in purchase behavior is the key — offering signals that are more telling than what we’ve been working with for years.
“I am what I buy but i’m not necessarily what I search for, or my ZIP code,” he said.