Today’s customers crave personalized experiences. 66% of people expect companies to understand their unique needs and expectations. Get this right, and you’ll be rewarded with customer loyalty – 91% of consumers are more likely to shop with brands that recognize, remember, and provide relevant offers and recommendations.
And yet, 64% feel that retailers don’t truly know them.
Here’s an opportunity for you to set your business apart by providing your customers with highly targeted, relevant marketing. But to do that, you need to understand their behaviors, preferences, and spending habits.
This is where point of sale (POS) tracking can help.
Your point of sale captures a wealth of data with every transaction. If you can gather these data in one place and analyze them using a retail analytics platform, you’ll unlock critical customer insights that you can use to deliver a more personalized shopping experience.
That’s all good in theory, but how does it work in practice? How do you use point of sale tracking to build up a better picture of your customers and target them more effectively?
These data enable you to segment all the different transactions that pass through your POS system into specific categories. For example, the number of items in a basket determines whether customers are carrying out a quick top-up shop, or a large weekly shop. Combine quantity and spend data, and you’ll discover whether they buy large baskets of lower-priced items, or smaller baskets of higher-priced items.
With segmentation, you can target customers with offers and promotions that are highly relevant to their basket. Say you want to target customers who do a top-up shop between 12pm and 2pm. You can narrow the focus of your offers to a few specific product categories relevant to that shop, such as essential store cupboard items. And you can exclude irrelevant categories that customers would be unlikely to purchase, such as clothing or electronics.
The snapshot you can capture from basket segmentation can be highly valuable. But to get deeper insights, you’ll need to join up those baskets over time, which requires tracking loyalty cards or customer tokens.
Increasingly, retailers are working with their payment providers to create customer payment tokens. This gives the retailer a 1:1 token which they can use to recognize when the same payment card is used in their stores or online. They can then understand how customers shop over time and offer marketing via coupon at till based on the historical behavior of that card – without knowing who the customer is.
Many retailers don’t have a 1:1 token, but it’s possible to create a proxy token instead. This uses a few key pieces of payment information that are visible on a customer’s receipt, such as card type, expiry date, and the last four digits of the card number.
These proxy tokens aren’t fully unique. However, they have a high success rate of tracking the same card where a loyalty card is not available and act as an effective alternative solution. It’s important to remember that all payment tokens rely on the customer using the same card each time they shop, which is typically the case.
The historical data you build up from tracking customer tokens will enable you to personalize your offers more effectively. For example, you can identify customers who used to buy large quantities of an item but who have since moved to a competitor. With this insight, you can target them with an offer for that item as a stimulus to regain their loyalty.
Tracking customer loyalty data captured at POS gives you all the benefits of historical data analysis that come with token tracking, with the added benefit of not relying on the customer using the same payment card. You also get a more complete picture of the customer, including data like their name, address, cell number, and email.
This unlocks additional channels you can use to target customers. With an email address, for example, you can send personalized offers via digital receipts as well as at POS. Or if they use a loyalty app, you can deliver targeted offers and messages via that channel.
However, loyalty cards are not used by every customer, so they will often only capture around 50% of transactions (sometimes less, depending on the retailer). It also costs money to manage and run the loyalty program.
The more opportunities you have to engage an audience with personalized marketing, the more likely they are to take action. In 2020, marketers that used three or more channels in any one campaign earned a 287% higher purchase rate than those using a single-channel campaign.
To turn point of sale tracking into highly personalized marketing, you need a fast and easy way to segment your customers into targeted audiences based on their historical purchase behavior.
An audience builder tool enables people across your business to create targeted lists for campaigns in minutes, without needing to consult an internal analytics team. Look for a tool that’s simple to use so even non-technical people can set lists up in minutes. To ensure your targeting is as accurate as possible, you’ll also want the ability to create dynamic lists that continuously and automatically update using real-time data streams.
With the right data, tools, and customer insights, you can deliver the truly personalized experience that today’s consumers demand.
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