The RetailWire Podcast

Utilizing Retailer & Bank Data for Superior Customer Experience

• RetailWire • Season 1 • Episode 34

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Ready to unravel the ever-changing world of retail payments? We've got a fascinating conversation lined up with our guest, Tom Burgess from SnippMedia. Together, we'll explore the concept of a Payments Media Network, a potentially game-changing platform that combines purchase data from retailers and banks to create targeted offers for consumers. If that piques your curiosity, join us as we delve deep into the future of retail payments, dissecting how banks are unlocking the value latent in their data.

RetailWire is the retail industry's premier source for news, analysis, and discussion. With a focus on the latest trends, technology, and consumer behavior, RetailWire provides a platform for industry experts and thought leaders to share their insights and perspectives. Whether you're a retailer, supplier, or service provider, RetailWire is your go-to destination for staying informed and ahead of the curve.

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Speaker 1:

Welcome to the Retail Wire Podcast, your go-to source for all things retail. Whether you're a seasoned industry veteran or just dipping your toes into the world of retail, our podcast is your one-stop shop for the latest trends, insights and discussions that are shaping the future of retail. Let's dive into today's episode. We are joined today with Tom Burgess from Snip Media and we are going to dive deep on the topic of payments. Tom, thanks for being here. Hey, Chase, Nice to be here with you. I'm really looking forward to hearing from your perspective, because you've been around the industry a while. Give us a little background on where you started and so, yeah, my background, sure.

Speaker 2:

So I'm the president of Snip Media, which is actually Division of Snip Interactive. It's a global platform as a service company and it's focused on helping consumer marketing brands, or CPGs, with customer acquisition, retention and engagement. We can get into that more later, but my personal background is 25 years of innovation, disruption, product discovery, development. That's what I do. I'm a serial entrepreneur. I started four companies. I've had the very good fortune of my career to work with great people in the advertising loyalty industries. I'm also pretty big adrenaline jerking and that's why I like to take the risk of launching new things and nobody's ever done before. So that's my background. The current effort that I have underway with Snip is Snip's Payments Media Network, so we can get into that.

Speaker 1:

When I saw what you're doing, I heard the term Payments Media Network. Of course, I think of Retail Media Network. That's a common topic that we've covered at Retail Wire Consumers having slim margins and trying to figure out how to keep those prices low enough so consumers aren't shocked by inflation and other price increases, but finding ways of gaining some revenue without having to increase prices. They've always done that with the brands, but you have a unique way of finding a solution. This is something that sounds like you pioneered a new idea with the Payments Media Network.

Speaker 2:

Yeah. So your spot on the whole Retail Media Network has been obviously bursting, growing very quickly, and it's based on the data that incredibly powerful and valuable purchase data that retailers have. So my world in working with loyalty programs and CPGs and also with Payments Networks so banks, large banks is that there's purchase history everywhere and it's not been well monetized. So the opportunity for something new here is to combine not just where you buy, but what you buy or what a consumer, what a shopper bought. Retailers know what you buy in their store. When you work with a bank, the bank knows where you spent. When you combine the two, you start to get to something even more valuable. So that's what we focused on with Payments Media Network, or Snips.

Speaker 2:

Payments Media Network is combining the two, literally taking the data from the bank and the data from the retailer, so that now a retailer and the brands benefit from not only knowing what their oil customers are spending on when they're in their stores, but they also can start to target people that they know a shop at their stores may not buy those products at their stores, and they can start to take effect. Now, the way we do that is unique in that we're putting offers inside a bank application. So we put offers inside what you and I and everybody else uses every day a regular banking application and banks win with putting these offers inside the bank application because it causes more, what the banks call top of the wallet or makes you and I pull their bank card out before we might pull a different bank card out. So banks like this and the retailers win because they're getting an extended reach.

Speaker 2:

So not to just blabble on and too far, but you mentioned retail media networks, the key there is that the retailers are bringing cool data, targeting data and attribution data, both on the front part of the campaign and on the back part of the campaign, and then they are putting offers out that are relevant to people based on what they've bought at that retailer in the past. When you look at that audience, they can, the retailer can max out that audience. Similarly, with the banks and someone like Bank of America was a partner of ours with 47 million card holders that retailer can now extend their reach. Bring their retail data that they have out and reach another 47 million people and guess what? They'll be able to target people that may not shop at their stores. And so there's this really cool melding of the two.

Speaker 1:

I can't help but compare this to a Google ads type of network, where here's a third party, here's someone who has an audience with data and they're able to target those people outside of the retailer's normal network. Banks have not been thinking of their data in this way for very long, have they?

Speaker 2:

No, well, so probably banks over the last eight, nine years have started to realize that they have a new type or a new approach to loyalty, that they have data they can bring to the table that can increase loyalty for themselves. I get laughed at when I walk into big banks. I've been working with big banks for like a decade. Walk in and I say, wow, you built a really cool media company here. And they look at you like, well, who is this jerk? Because they're back, right, that's what they do. They run payments. Well, the reality is, they've got incredible data and a consumer typical consumer will go into their banking application two to three times a week. So now, households are different, right? So in my house so my wife is that person that's going into your three times I'd probably go in maybe once or twice a month, but that's on average.

Speaker 2:

So you have a lot of eyeballs in those banking applications. You have, therefore, this, like you said, tying it back to a Google network. You know if you've got a ad words or you've got any kind of Google campaign, it used to be run off of third party transaction data, third party data of any type. Well, we all know that third party data is going away, the cookies going away, and so first party data is what's hot. Therein lies the all growth of retail media networks. They're first party data. They can't take that away.

Speaker 2:

So when you take first party data from a bank, first party data from a retailing and put them together, you end up with some pretty cool overlap and you're monetizing an audience that hasn't really been monetized for advertising before. It's been leveraged by the banks for loyalty but not advertising. So that's the key thing that you're touching right. Then you're recognizing that's the difference for the banks. Suddenly, we've got a consumer who's inside an application on a very regular basis a lot of impressions, if you will, a lot of activity, very engaged, very loyal and also trusting audience and giving that a person, that shopper, an opportunity to save. Like you were saying, I think, earlier when we were talking. You know this is a tough time right now, right, watching interest rates go up or we're watching what we spend on how much money we're spending, and it's nice when you turn around in the place where you keep your money is giving you a way to save that money.

Speaker 1:

You know I'm a consumer and if I'm looking at Facebook and I start to click on things, I start to get ads for that product or from similar companies. Maybe I'm just checking my bank account. I don't want to see ads from. That feels like an invasion of privacy. What do you have to say about that? Perfect.

Speaker 2:

Yeah, so that's the whole privacy piece comes in everywhere you go, right? So what's my data being used for? Well, you've got, obviously, your European groups. That came out first, gdpr, and then you've got CCPA and you've got all these other different loyalty standards that have come to market in protecting you and me In the banking industry. It's a embedded it existed already Like there's no ability for a bank to leverage your data outside their environment for any kind of market, and so what they do inside the environment is it's all non-PII, which everybody kind of knows personally identifiable information, and non-PCI, which is payment card information.

Speaker 2:

So there's no data that's private, every shooter or shared with any brand or any retailer or anything like that. The only data that is used inside the banking application for these offers is where you have purchased in the past. You purchase history. So let's talk about, let's say, you've got a frozen pizza brand and you want to target people that buy pizza at pizza restaurants. That's how it would be used. That's a really simple and, by the way, you've got some type of health care you want to purchase, or you want to target people that spend at, maybe, a spas or something like that. You know these kinds of things. That's the target I'm talking about Right.

Speaker 1:

So it gives them a category maybe not specific products, private information, but just categories and spending patterns and the hope would be that these are ads that are sensitive to that or valuable enough that the consumer can open the banking app and think this is actually a nice feature. I'm getting some deals or something relevant to me, yeah.

Speaker 2:

I mean how many people we all can say this. You know we get charged if we carry a balance on a credit card. You know there's fees associated with having a bank account and it's a nice feature to see your bank give you some credit. You see your bank give you something back, right? So it's a consumer experience that the offers are there. You could activate them. They're not interrupting your banking application effort. You have to go into one click off the homepage, for instance, to find the offers and then they're relevant and it's not advertising as much as its offers. That's really what it is. These are offers that are put right.

Speaker 2:

Bringing a retailer in as a partner now Allows that retailer to possibly even bring their data. So now as a consumer, I might see a particular offer that's retailer based. So it might be xyz retailer, because they're my geographic area, like it's, so it could be geo-targeted and oh yeah, I shop there. Click on that, you go inside and there's offers at that specific retailer. So now a retailer is getting into the mix and they're starting to be able to bring their data to the table and need to keep becomes even more relevant to to the consumer that there is a a lot of Understanding that people, no matter what your income level, 80% or so of people will take a deal if it's relevant to them. These are those statistics. So it's a perfect environment in a trusted environment, where the consumers Are receiving a value for back from something that they're paying for already.

Speaker 1:

Well, this reminds me of the credit card rewards. I usually take the cash back because you know I don't need a gift card, but there are different deals like that that people are used to seeing inside of a credit card Dashboard. I Don't know if I've seen it in a normal checking account kind of banking application. What are, what are, some of the things that retailers Would be accustomed to seeing, and how is what you're doing different than than the norm?

Speaker 2:

So, yeah, they. This is a cash back program typically, although some banks that allow you to earn points, like you just mentioned, can have what are considered zero, zero dollar value transactions. So meaning, okay, consumer, you're in your backing application. The back says, hey, when you shop at this retailer or when you buy these products at any retailer, in some cases You'll earn points and then the points could be, like you said, at the end of the month, year, quarter, whatever, I being convert those over to cash. However, you want to burn those plates down, you can do that. Typically, though, in the large banks, they'll do cash back. It's what's most relevant, right? We all know it. Consumer wants cash, right? It's always the highest number. I'm when you, when you do these research projects, it looks it's what do you want to earn what cash back? So typically it's a.

Speaker 2:

It's an environment where you're the consumers receiving cash at the point of sale in store. I've gone into the store, I've preloaded Offers that my bag is put in front of the wall and I go into the store and I use my payment card and then when I walk out, I get cash deposited back into my bank. It's called a statement credit. It can also work because we have different types of programs that we run and other people run that will give the consumer cash discount right there at the point of sale. So the till will actually drop down. So take a step at the point of sale. That till drops down. Instead of pay $100 at the basket, you might pay, you know, something like 92 dollars or something to save yourself the money right there. So it's a very real experience.

Speaker 2:

You realize as a consumer the value very quickly, the points based program. You're notified. So hey, you just earned x number of points. So you're walking out the door and you get an alert on your back. I'm the one who says you're just earning points. So it you know, in these programs there they're either way, but they don't replace. Maybe in some cards, if somebody might say well, I've got my airline, favorite airline card and iron points whenever I spend on that airline. How's this gonna be different? It's very different. You, it's not about the activity with the co-brand, it's not about activity with your bag, with your airline, with your rental car. It's not that activity. You continue to earn those points. This is additional activity. This is earn points or earn cash back when you spend at these more affiliated retailers and buy these brands that are brought to you inside the app.

Speaker 1:

Got it Okay. That's different from the traditional. What does a normal partnership look like? If a retailer were to get into this, what are some examples? That would be kind of low-hanging fruit or maybe the first project that they'd try.

Speaker 2:

Yeah, so a retailer's benefit here is number one. It's big audience, right. So the top five banks in the country, in the US market, are doing these programs. It happens to work with Bank of America and a couple other top five banks and we work with hundreds of small banks as well. So we've got about 70 million active user audience right now that we can help a retailer reach. We can do that geography-wise, we can do all kinds of different targeting and make sure that their efforts are based on their goals. Right, they're based on the KPIs they want to achieve. The only thing they want to achieve is that they've got a PM on, they maybe have a retail media network running and they maybe max out on their audience, right, they have other budgets, that being the shopper dollars or the shopper marketing dollars that they've had from their vendors, their CBGs, and they would like to continue to spend that, but they've maybe exhausted their audience on it. So now we've got this massive audience that allows those retailers to put their shopper dollars or their private label dollars towards this unique audience, right. So retailers have a lot of benefits.

Speaker 2:

An additional benefit, one that's a little more geeked out, is getting down to the concept of offsetting interchange. So retailers don't like to pay interchange. Again, every retailer is working on tight margins. Why pay so much? Interchange Bank swing while they're going to say, well, we've got to make money. So are you going to go to the bottom you know it's an erase to the bottom or are you going to try to find more value in the relationship?

Speaker 2:

So this is this concept of offsetting interchange, which means, okay, a retailer can go to a bag, a retailer can reach an audience and, in fact, maybe even generate additional revenue where the bag is bringing the dollars, the advertising dollars, to the table. So now you've got a retailer that says, hey, I'll put these. Or I should say the bank says to the retailer I can take your offers, put them in front of my audience and drive people into your store and give you the attribution data that proves that it won't. And they only pay when the person redeems. So it's a direct correlation to interchange. So it's a unique. That's a very unique. We're getting deep into weeds there, but that's a very unique value proposition to the retailers offsetting interchange.

Speaker 1:

I was just going to ask how much does it cost the retailer? And then you got into this new kind of interchange offset. So in this case, why would the bank pay the retailer?

Speaker 2:

The bank generates the revenue through CPGs. So you guys know but in your audience knows this but there are shopper dollars that are associated directly with the retailer and the brands together. Then there are national dollars and both play in this game. So if the brand comes to the table, which is to the table of the bank, and wants to put offers out for their products across multiple retailers, they can use their national dollars and the bank is paid and SNP is the intermediary and they're running the whole network making this all. We're the glue that keeps us together. That makes sense. So when the brand pays, we have dollars that we can share. So if a retailer brings a little bit of their data to the table, then they get paid for that. So there's the offset. I kind of got loose and goosey there. I had a little bit there when I was saying the bank's paying, it's the funds that come into the bank or that media value that gets shared with the retailer when the retailer is bringing little data to the table.

Speaker 1:

What are some cautions that retailers should or even CPG brands, you know when they're spending this. What are some cautions that they should be aware of?

Speaker 2:

Yeah. So I'd say, in our experience, the biggest caution is managing budgets, managing such a large audience and understanding, testing, not expecting to be able to reach an entire audience of 70 million plus people and not have it just burn through a budget in a week. So there's targeting opportunities here. Take your KPIs, put your program together, make sure your marketing is clear to the consumer, make sure you're targeting to reach the right people so that you're getting the right value proposition. Afterwards, additionally, studying the data and we all do this we're, all, I would say, interested in data upfront. We look at dashboards and we see wow, look at the difference there, look at that trove, look, keep studying that and optimize as you go, because this is not a, this is a game of return and, fortunately, because it's a newer, unique environment, right? So not many people have heard about putting offers up on bank applications, I mean, but it's a massive audience. Wow, I got to take care of this or I got to take advantage of this. How do I do it?

Speaker 2:

Well, the good start here is that there's an opportunity to do it on a performance basis. In other words, pay for what you get, don't pay beyond that. You're not just buying impressions. It's not that world you brought up, kind of global, or in Google, facebook, you're buying impressions, mostly, right, it's a high value audience for getting your brand in front of somebody. This is a shopper, more shopper marketing, promotional dollar type of approach where we're driving consumers to take an action, to make a purchase, and that's the data playing a part. Those other channels, those other traditional digital media channels, don't have one to one attribution. So, as a brand or retailer, make sure you know what your goals are, make sure you apply the right budgets to it and make sure you get your marketing correct so that when you run a campaign you're getting the most return on your value, and so it's an ROI game.

Speaker 1:

You know, in e-commerce there's a lot more attribution that can happen because you can follow that customer journey all the way to the shopping cart and purchase. But in brick and mortar it hasn't been part of the tool set and I think now it's becoming that as retailers merge that e-commerce with the physical store and to drop a buzzword here but Omni Channel merging that data all in one. But what you said about the attribution and a banking app do you know that they made that purchase?

Speaker 2:

No, when they made it, where they made it, how much they spent, and it can be tied to an ID. Right Again, keeping very careful not to share PII or PCI. You need to be relevant to specific data points, an ID so you can say this ID increased their frequency, this ID increased their basket. Now, these are the types of value metrics or metrics or KPIs, whatever value, whatever you want to put around it, what you're going to learn as you run through the programs.

Speaker 1:

So the metrics are shown, but they're sort of anonymized. Yeah, they have to be anonymized?

Speaker 2:

Yeah, there's no. Yeah, nobody wants to give up any privacy information.

Speaker 1:

The bank would have to pay me to bank there.

Speaker 2:

if that's the case, yeah, and the goal and you know you kind of imagine being it took just in order to get these programs up and running. The banks make vendors like SNP go through a year-long process, a vetting process. It's not an easy thing to get on the ground right I've been doing this for a decade and it's not easy. But when you put it together in the right way, then the value proposition works. Consumers getting those discounts. The consumers getting maybe a fair market value for, or a better offer from their banking application, from their bank, which is providing them with their credit cards. So they're feeling better about you know, hey, I'm spending with this card and this card gets me more value back. That's a good thing for the bank, good thing for the banking consumer.

Speaker 2:

But the retailer is winning in the sense that they're driving more traffic into their stores and they're getting more data about what's going on. They know, because we mentioned earlier, that a retailer knows what you do in their stores but you may not know what the consumer where else? That consumer what's your share of the wallet? Right, and literally that bank and retailer Berger brings that data to them. So there's and of course the brands are finding this as an opportunity to help drive transactions that they may not have seen from this unique audience because, as I mentioned earlier, this is a audience that's of regular. It's not the typical coupon seeking audience, right, it's not those the coupon crazy type people. It's those people that are just in their banking application. They're everyday people that are looking to, hey, make it easier for their lifestyle leave their family, kind of.

Speaker 1:

Yeah, that's a throwback to the initial start of this, I think was the incentivized receipt scanning the rewards programs, where you scan your receipt and then you're giving them the data. I think most people didn't even realize what they were giving. They're like I don't know why they want my garbage. It's just a receipt, but then you get some kind of reward points or a few pennies for each time you do that, and what you just said was really insightful that the people that are going to do that are a certain type of shopper. There are people who just say that's not worth my time, and so you're getting a different segment of the population and that might not be the useful segment that a retailer or brand is looking for.

Speaker 2:

The retailer may already be reaching that segment and this is giving them an opportunity to reach beyond that segment. That's kind of the big point of this audience, and it's a big audience. Is there going to be a bleed over? Sure, you're going to have some people that are already at it and they're going to find this and they're going to want to participate as well. But you're going to reach other people and you're right, although I think receipt scanning is a valuable still channel in that in some cases at smaller retailers, it's going to be a benefit for the brand.

Speaker 2:

Brand may want to put programs out that allows a consumer to buy their product at any retailer, right? So some small retailers the corner shop, the Main Street Bakery they're not going to be connected to these massive data networks, right? So you've got to leave the door open for those folks to have those programs and that works very well for a receipt scanning kind of thing and it works well for that segment or that audience. This is a program where these types of programs reach everywhere, and now all I'm doing is maybe spending with my debit card or my credit card, or maybe I'm taking one little extra action at a point of sale, scanning a barcode identifying myself and someone, and I'm getting the benefit of all of this. It's a unique proposition. It's a brand new. Audience is the big part of it.

Speaker 1:

It reminds me of Target's red card discounts. How is this similar or different than that?

Speaker 2:

Yeah, so they're all retailer cards. So if you look at any retailer's loyalty program, however, the red card is a payment card. You are. You talked about the loyalty program that drives activity in that retailer, and this again is a cross retailer. That's why these are funded by the CPGs typically. So it's funded in the sense that, hey, here's an offer for XYZ product, maybe it's a paper product, maybe it's a health and care, health and wellness product, or it might be some type of food product, and the consumer is now able to make their choice when do I want to go? So there's a difference there. Right, it's not just associated with go to this particular retailer, therefore participating in that particular loyalty program. So that's where it draws in national dollars and also sharper dollars.

Speaker 2:

So in the backing environment and the way this is all set up is, a retailer has the opportunity to leverage their audience. They can put offers up that are only available at their store and they can do best offer. So they can go to a brand. They can say spend on my retailer and get this deal and they can lock that up and the bank is happy to pull out that A retailer or sorry, a brand that says I got a national dollar budget here, I've got to reach everywhere they can now do the same thing so they can put up a more agnostic offer and the consumer can redeem anywhere. So both programs work. But yeah, you know, you're right on that the Co-brand card. So many retailers might have a card that's got their Co-brand and it's a credit card, it's payment card and it's going to have activity that the consumer is going to be able to do in their stores to earn points. It's just a different type of, it's more of an agnostic program.

Speaker 1:

So this sounds like there's a great opportunity for brands who have a national budget and they don't want to manage region by region or partnership by partnership. But I'm curious how retailers can discover those partnership opportunities. Is there sort of a marketplace that they can jump in and see oh we carry that brand, let's partner up with this. Banking advertisement payment.

Speaker 2:

Yeah so you're doing version 2.0 for me here and you know that's great. The cool thing that's happening right now is that very large bags are doing this. This isn't like, oh, we've done a little tiny test with one little region like this is reaching the entire country and you can pretty much if you're a large retailer and you want to work with a bank and can go to that bank and there'll be a player like a SNP. So I'm taking my SNP hat off and kind of putting my industry hat on and saying, if you're a big brand, a big retailer and you want to do something with a particular bank, you can go to that bank and they're going to have a program that's similar to this.

Speaker 2:

Not all of the banks have that capability to go to the SKU or UPC level, but that's coming and that's what SNP's role is in this marketplace. We're bringing the SKU capability. So you go to Bank of America and you say, as a retailer, I want to promote my private label across your banking audience. Great Bank of America will say go, work with SNP, put this together and we can do a partnership. So that's kind of it is an opportunity right now, whether it's private label or it's shopper dollars? There's no. I would say version 2.0 will bring in that marketplace. But today we're at the partnership. Pick up the phone, send an email.

Speaker 1:

And, as expected, for a lot of emerging solutions, right? Well, tom, this has been so insightful and I'm glad you were able to answer my questions. I'm always connecting them to things I know and I don't know a lot, so thanks for bringing that knowledge. No, that was great, that was a good conversation and, yeah, it's been fun talking with you. Chase, if people want to find you, obviously I connected with you on LinkedIn so I can find you there, but what are the ways that people can reach you to follow up with questions?

Speaker 2:

Yeah, the best is going to SNPcom. That's SNIPPcom, and on there in particular is SNP's payments media network and you can find that information there and my email is using it's tomburges at SNPcom.

Speaker 1:

Well, this has been such a great conversation. Thank you for joining us and for those who are new or just kind of stumbling upon the podcast, you can subscribe to us on Spotify, apple, youtube, all the different podcast platforms, and we also have a LinkedIn page you can follow for the latest news and events that we're doing and at retailwarcom slash subscribe. You can find our newsletter. Thanks for tuning in and we'll see you next time.

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