Transaction marketing gained widespread acceptance among retailers in 2010, as they began to recognize marketing in the electronic banking channel as a far more cost effective way to encourage repeat business, increase the average transaction sizes and drive same-store sales. It enabled retailers to overcome the marketing waste associated with other channels -- like Groupon -- and consistently provided compelling and measurable return on their marketing investment. The coming year will be even more exciting for transaction marketing as it is evolving in ways that stand to reshape the retail industry by providing unprecedented insight into consumer purchasing and behavior, mobile delivery of offers, increased consumer reach and prepaid cardholder targeting.
The bottom line is transaction marketing affords unprecedented insight into consumer activity and purchase behavior and it will require marketers to re-evaluate the effectiveness of their loyalty programs. For the first time in the history of the retail industry, marketers will be able to quantitatively know, for example, how loyal their “most loyal” customers truly are because they can see how that customer’s average ring or purchase frequency compares to that customer’s activity with a competitor.
Many retailers have traditionally measured loyalty by purchase frequency and the amount spent with the retailer, however, transaction marketing has shown us that these measurements are wrong; they simply identify the biggest spenders in a category and rarely, if ever, predict how much of a customer’s spend a retailer successfully captures or might capture. Beyond driving profitable top-line growth, insights gained by specifically measuring consumer spending, available only through transaction marketing, will continue to give retailers unprecedented levels of insight into consumer activity, loyalty and purchase behavior.
As transaction marketing platforms partner with leading mobile financial services providers, retailers will see consumers embrace transaction marketing offers presented through their mobile devices. This mobile evolution will be invaluable to marketers, considering the exponential customer adoption of the mobile banking channel. Transaction marketing’s extended reach will improve the visibility of offers, as consumers will be able to view and redeem them while they are on the go. Plus, offers will be even more