Purchase-Based Analytics and Big Data for Actionable Insights

Abstract

& THE TREND OF mining customer loyalty data for insights on consumer purchasing behavior has been in the making of more than three decades of market testing and various tactics, as the card-linking and the purchase-based industry have enabled merchants and advertisers to close the gap between digital ads and local in-store paper coupons. Card-linking allows consumers to link or attach their existing credit or debit cards to rewards systems, such as loyalty programs, digital coupons, or nonreward-based systems, such as mobile wallets. While cardlinking has been growing within the larger context of the e-commerce and retail sales ecosystem, e-commerce has accounted for only 9.8% of all U.S. retail sales as of the third quarter of 2018, according to the U.S. Census Bureau (2018). About 64% of consumers have used PayPal to make online or mobile payments at least once in the past year, compared to 22% for Visa Checkout and 8% for Masterpass, according to a 2018 survey from Bernstein Research. Big data is a term that describes massive volume of data, both structured and unstructured, that businesses face on a day-to-day basis, collected from customer interactions, purchases, and browsing history. Big data, derived from traditional and digital sources inside and outside of companies, can be analyzed for insights that lead to better-informed decisions and strategic business moves. Managing extreme amounts of data can be complex and challenging at a time when information is increasingly viewed as a strategic resource. 14 However, the amount of data is not as important as what organizations will do with that data once it has been collected and analyzed, which would be for organizations to take actionable steps with the findings to target a specific audience or implement amarketing campaign. Data can be normalized to make it useful for marketing and analytics, leveraging sophisticated algorithms. As a result, value and meaningful scale can be delivered to marketers, financial institutions, and consultants, while handling this sensitive data. In general, transaction information provides concentrated sources of data for customer analytics that have been largely untapped. However, there are companies and banks taking steps, Digital Object Identifier 10.1109/MITP.2019.2897658