Solving the Anonymity Problem at Checkout

In the brick-and-mortar retail landscape, businesses often operate with a significant blind spot: they don't truly know their customers. While digital loyalty programs can yield match rates of up to 30 percent, in-store rates tell a different story. In-person retail identification often lingers in the single digits, leaving the vast majority of in-store shoppers categorized as unknown.

This lack of connection with in-store shoppers creates a massive disconnect between in-person transactions and identified buyer profiles. To bridge this gap, businesses can look toward a very granular and consistent data source: payments data. By leveraging it, retailers can finally transform once-blind transactions into a sophisticated, targeted customer strategy and turn unknown shoppers into more loyal customers.

The Cost of Anonymity

In an era of precision, retailers are forced to rely on untargeted marketing that falls short in reaching priority in-store shoppers. This disconnect stems from a historically broken link between card transactions at checkout and individual buyers, leaving merchants and marketers without actionable insight into buyer profiles.

When data remains fragmented and unverifiable, measurement becomes inaccurate and marketing costs skyrocket. Ultimately, failing to identify the person behind the purchase creates distance between a business and its customers. Distance makes it nearly impossible to deliver the high-touch, relevant experiences that today’s shoppers have come to expect. This, in turn, hurts physical retailers, with 70 percent of customers saying a personalized shopping experience, where the employee knows who they are and their history with the company (such as past purchases, buying patterns, and support calls), is important.

The Value of Verified Purchase Behavior

The solution lies in connecting consumers to specific purchases. By building a holistic view of who is buying, regardless of the channel, businesses can deepen relationships and personalize experiences for every customer, not just the small percentage enrolled in loyalty programs. This expanded view of data allows retailers to:

• Capture the Unknown: By identifying casual and non-loyalty shoppers, brands get a fuller picture of their entire customer base. This expanded audience reach lowers advertising costs through more detailed, purchase-based coverage.
• Target With Precision: Engaging lookalike audiences — i.e., shoppers whose behaviors mirror current high-value customers — leads to higher conversion rates and segmentation strategies based on actual spending rather than inferred demographics.
• Optimize in Real Time: Verified behavior enables purchase-based attribution. This provides clearer, faster insights into return on investment, enabling marketers to adjust campaigns in real time by eliminating ad waste and enhancing consumer experiences. Furthermore, treasurers can see the value of their data investments.

The Future for In-Store Retailers

The growth path for brick-and-mortar businesses depends on an evolution: transforming the point of sale from a place where transactions are processed into a place where relationships are recognized. Identity verification platforms that securely tie transaction data to customer identities help physical retailers to increase match rates by 2x to 3x, allowing them to regain the digital advantage of personalized relevance and a level of visibility not previously possible.

This type of visibility into in-store card transactions helps retailers create a more unified view of in-store and digital purchasing behavior at the segment level. With greater visibility into their customer base, retailers with a heavy in-store presence no longer miss out on personalization and smarter segmentation strategies for both loyalty and non-loyalty customers.

By adopting a strategy that prioritizes payment-linked intelligence, organizations can eliminate long-standing segmentation blind spots. Ultimately, moving from unknown to identified not only enhances marketing metrics but also fosters deeper, more genuine customer loyalty through personalized, data-driven strategies.

Doug Nash is vice president of data and analytics solutions at Fiserv, where he leads data product strategy and commercialization for analytics-driven offerings that help clients activate data to drive growth.