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What’s the value of a receipt?
Usually, it’s the slip of paper that shoppers slide into a bag, only to be checked in the rare case of a discrepancy.
The data on that slip, however, should not be overlooked.
With loyalty programs, however, CPG brands are tapping what's in the receipts. By taking a picture of a receipt and submitting it through a website or app, shoppers receive a coupon or cash back.
As brands run more of these types of programs directly with consumers through standalone marketing or loyalty apps, these receipts can also offer insights about consumers. With that piece of paper, brands are not just getting the info that a product was purchased. They can also see specifics about the item, and other items that were purchased in the basket along with that item, some of which may have been from a competitor. They can also cross-check whether other items around it were on sale. The data can go a long way toward helping brands understand their business.
It’s data that Veryfi is providing access to with mobile capture technology that can be used within a retailer or CPG brand’s loyalty app.
“They need to be able to extract the data, they need to be able to generate insights from the data and then reimburse the end user,” said Veryfi CEO Ernest Semerda. “We provide technology to capture, the technology to extract and then they can generate insights. We give them data that is standardized that they can rely on, and it’s clean.”
Veryfi recently debuted enhanced capabilities for receipt capture through it software called Veryfi Lens. Comprised of a software development kit and OCR API, the tool contains a custom camera application that takes a picture of a receipt. Is it able to stitch together a long receipt into a single picture by running a phone over the length of a slip.
This powers the capture of data at the SKU level. Using AI, Veryfi can extract the info from the receipt and turn it into structured data in seconds. This is the real-time information that brands can then use to draw insights.
Addressing an issue that’s of top concern to brands running loyalty programs, Veryfi has fraud detection that uses image analysis to identify whether a receipt was doctored or duplicated.
Veryfi, which is based in Silicon Valley, was founded in 2016 by Semerda and Dmitry Birulia, who both previously worked at Coupons Inc. They’re engineers who built technology to transform unstructured data, and they are now applying it to receipt capture, among other markets. The company raised $12 million in Series A funding in 2021.
To Semerda, this time recalls the 2008 recession. At that point, brands and manufacturers were infusing funds into the market in an effort to boost business.
With the current macroeconomic challenges brought by a pandemic and inflation, he sees similar activity happening now.
“History doesn’t repeat itself, but it rhymes,” he said.
Especially as shoppers return to in-store settings, loyalty programs are one way brands are incentivizing purchases with cash rewards. Where brands may have previously worked with third parties, the ability to go direct-to-consumer opens up opportunities to run loyalty program themselves. Companies like Veryfi provide the tech tools to help them perform functions quickly, accurately and securely, where they might have previously turned to bookkeepers.
Veryfi’s tools also collects the first-party data that brands prize. It’s also data that they wouldn’t otherwise receive from retailers.
“Data is the new oil,” said cofounder Birulia. “If brands want to make decisions about how to improve and how to be relevant to Gen-Z, they have to know their customer. To know their customer, the receipt is the perfect example of where they can get a wealth of data.”
With receipts from different retailers, brands can compare results across multiple point of sale locations, or even different retail businesses. The data can also help brands to adjust their approach based on what the data shows. With real-time data offered by Veryfi, they can adjust quickly. Rather than getting info once a month as many brands often do, Semerda likens what Veryfi enables to the driver of a car, who is always adjusting the steering wheel as they go.
“That’s much more powerful because you can see the business much more clearly than your competitor," he said. "That's the beauty of working directly with the brands and having technology that’s available in real time, giving that information so they can steer it.”
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On average, customers spend $59 more than the value of their gift card, Fiserv found.
In retail, sales are often measured in goods, whether they are purchased for ourselves or someone else. There are plenty of strategies that brands and retailers use to increase those sales, whether it is marketing, loyalty programs or how that item is presented.
In most cases, these are two different parts of the equation for retailers: The product that is bought and the strategies that lead to the purchase.
That’s what makes the gift card unique.
It is an item you can buy, with a section in the store all its own. Eventually, it leads to the purchase of other goods, so the gift card is leads to a direct sale. Yet it’s also a means to build a retail brand and create incentives that both introduce customers to a store and keep them coming back.
That’s a key takeaway from the 20th Annual U.S. Prepaid Consumer Insights Study from fintech and payments company Fiserv.
At this point, the gift card feels like a staple of the shopping experience. But it is only about 30 years old. In 1994, Blockbuster Video pioneered the sale of cards for gifted purchases directly as a means to combat fraud in paper gift certificates. Since then, they’ve proven to have a multitude of uses that stretch beyond the holidays.
Starbucks and Amazon gift cards are commonly distributed as prizes at team-building events and as pick-me-ups by friends showing they care. In 2022, 60% of consumers said they received a gift card from an employer, according to the Fiserv report. That was a big increase from 32% in 2019. People appreciate the gesture. The survey found that 85% of employees think that gift cards from an employer make for appropriate incentives.
For people looking to show generosity, gift cards can also be a means to stretch dollars. At a time of high inflation, people are looking for deals with their discretionary purchases. Gift card promotions that offer discounts and bonuses are proving particularly popular, the study found. Two-thirds of consumers said promotions can influence them to purchase more, while more than half of consumers took advantage of such an offer in 2022.
Yet the more difficult consumer environment is also having an impact on overall gift card sales. In 2022, the growth of gift card purchases slowed.
“Overall, 56% of U.S. consumers purchased more gift cards in 2022 compared to 2021,” said Tom Niedbalski, VP of gift solutions at Fiserv. “This was a decline from the 73% of consumers who said they bought more gift cards in 2021 than they did in 2020.”
Inflation and less discretionary income were the driving factors for consumers who said they bought fewer gift cards during 2022, as 35% of consumers said inflation was the reason they were purchasing fewer cards.
It's important for brands and retailers to understand why consumers buy gift cards. But it's just as crucial to understand where they can fit in retail strategy. Beyond sales, gift cards can help drive repeat customers, and extend a brand. These tools are particularly valuable at a time when retailers are focused on profitability in a tougher consumer environment.
Fiserv explained four areas in which gift cards are of particular value for brands.The following is directly quoted from Niedbalski:
Improving cash flow and revenue. Gift cards not only drive in-store and online traffic, there is an associated “lift,” or overspend, when a gift card is converted into a sale. On average, customers spend $59 more than the value of their gift card.
Repeat customers. Retailers use gift cards to foster loyalty and customer engagement, ultimately leading to repeat customers. One way we see this play out is through promotions associated with gift card sales. For example: a consumer who buys a $100 gift card for the holidays will receive a $20 bonus card that can be used after January 1 – creating a pre-holiday sale and post-holiday transaction in the New Year.
Branded currency. A gift card places a merchant’s brand directly into the consumer’s wallet, increasing brand awareness and ensuring the merchant’s brand is with the consumer when they are looking to buy.
Year-round marketing. The gift card has grown beyond the traditional holiday season. From birthdays and graduations to anniversaries and babies, gift cards are becoming the most popular way to recognize milestones – giving retailers opportunities to run additional promotions throughout the year.