Without data, the digital transformation of retail would be virtually impossible

By: Sophie Weaver

18, April, 2019


Artificial Intelligence -

Interview with Data Analytics Expert Elisabeth Kurkowski from Wirecard.

A digital omnichannel strategy and complete customer centricity is essential for brick-and-mortar retailers today – because it is the only way to achieve an outstanding customer experience that satisfies shoppers and keeps them coming back. In this interview, data analytics expert Elisabeth Kurkowski, Lead Product Consultant Data Products at Wirecard, explains why payment data, data analytics and AI play a central role.
How are payment data, retail, and data analytics related to each other?
To answer this question, let me first define what payment data is. It’s a collective term for all kinds of information about shopping: who has paid which sum, with which payment method, when, and where.
Retail needs to fully cater to the following three dimensions: the customer experience, shopping insights and reaction time. All these three dimensions need information and insights based on data. Payment data is the most reliable source for this – so to say the single source of truth – as payment data tells the story of each purchase, return or other financial interaction with the customer.
These are the three main factors that help retail to digitally transform – they all are data-driven

As a global innovation leader in digital financial technology, Wirecard is fully aware of the central importance of data analysis – without this, digital transformation would be virtually impossible. Data analytics generate very valuable insights into customer shopping behavior and payment patterns. Therefore, data and their intelligent evaluation serve as a basis for informed decision-making for retailers. 

Actually, our whole business model is data-driven: Wirecard is a holistic digital payment platform, which offers a continuously expanding ecosystem of real-time value added services to increase the commercial success of customers of all sizes around the world.

What role exactly does payment data play for the merchant?

Payment data and the insights derived from it can have a huge positive impact on retailers as they are able to offer a new quality of insights. By truly understanding the “what” and “why” of customer buying behavior, merchants are for the first time really able not only react to it but also act proactively. This knowledge generates a key advantage compared to competitors.

Take two examples: with these insights, retailers are able to optimize their payment processes because they better understand conversion and the actual usage of payment methods. Therefore, they can adapt the flows and mixture of payment methods accordingly.

Or take customer retention campaigns: as a merchant, data helps you recognize how and when to target customers in order to reactivate them, or to prevent losing them – this is highly effective data-driven churn prevention.

There is a number of relevant data sources for retailers – but payment transaction data gives the most valuable insights

What does data analysis mean from a customer’s perspective?

First of all, nobody needs to worry about privacy: payment data analysis is not using any personal information. Only those customers who have agreed to become members e.g. of a loyalty program, will receive individualized and personal offers based on their shopping behavior.

Our analyses run based on tokenized information and use customer segments, e.g. groups of people who have bought sneakers of a certain brand in the past or who usually buy certain things together. Even when based on segments we can identify significant shopping patterns and customer group behavior which merchants can use for their strategic planning.

Shoppers benefit greatly because data analysis enables a better customer experience. This is because through data, merchants understand what specific customer groups want. As a result, customers can be offered more appropriate information, more suitable features, or better prices – for example by adapting marketing campaigns to specific needs of certain customer segments. Members of a loyalty program could then enjoy a personal voucher via their digital device.

Customers also profit from better marketing planning for the merchant, as retention, acquisition and up- or cross-selling campaigns can only run successfully with a rich database. The more I know about my customers, the better I can serve and even anticipate their needs.

Data enables retailers to optimize their customer relationship

When we talk about data, let’s also talk about artificial intelligence: how will AI influence retail?

Currently, AI is used for example in chatbots and in order to facilitate standard customer interactions, i.e. when you need more information, want to return something and so on. In these cases, data is already helping retailers meet their customers’ needs.

However, there are even more exciting applications, such as AI- and data-driven smart product recommendations based on past shopping behavior. We would call it common sense, but the exciting thing is that thanks to AI, well-fitting shopping recommendations are completely machine-made. For example, “If someone buys a shirt, they might need an accompanying tie as well” or “If someone buys sunscreen, they might go on vacation and might also need a pair of sunglasses.” Relevant offers will then be displayed via electronic price tags or via the user’s smartphone. This will especially facilitate shopping for bigger projects like a new kitchen or a whole trip to a foreign country.

Or take shopping voice-operated assistants like Echo or Alexa, these are also based on data and AI. They are so popular because they make users’ lives easier – just open the fridge and tell Alexa what groceries to buy. Actually, we have seen that thanks to this technology, the user interface is slowly disappearing.

What will payment look like in the future?

In a nutshell, payment is becoming easier, more seamless and more digital – while at the same time being very secure.

The technology is already available today and it will continue to assert. For example, in the future it will be quite normal to confirm a payment with biometrics – for example with a fingerprint or your face – or the payment process might become completely invisible. We already know it today from the “Uber Experience”. In supermarkets it will become more and more commonplace for people who quickly identify themselves, at the entrance via biometrics, to select their desired products and then walk out of the store – without having to queue up and scramble for change. And all of this is thanks to intelligent technology that uses payment data, data analysis and AI.

Written by Elisabeth Kurkowski for Wirecard