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April 23, 2013

Big Transaction Data Creating Big Value

Isaac Lopez

In many ways, we as individuals are what we buy, says Andy Mantis, Group Head of Business Solutions for MasterCard Advisors, who is tasked with using the massive amounts of transaction data that MasterCard receives each day and turning it into actionable insights for retail clients.

“Big data to us is that fast set of anonymized and aggregated transactions that we at MasterCard collect,” explains Mantis. “Actually, we collect about 160 million transactions every single hour of the day – so we do have a lot of big data – but the key is taking it into micro and macro views; being able to take that data and show trends of consumer spend and then really being able to apply that in a way that is meaningful to our merchant consumers.”

Mantis say that because MasterCard has a 360 degree view of consumer spend, they are able to use that data to paint a picture of consumer behavior across channels and industries in a way that is actionable. This includes using their data to help retailers to design channel strategies, including everything from specific offering in store or online, all the way to location strategies for expanding.

One example is a home goods provider that was part of a coalition loyalty program that was operating under the idea that they had a significant share of their existing customer spend.  “We worked with them to identify the overall opportunity,” said Mantis, who says using MasterCard spending data, they were able to find more market share. “By taking that view of customer spend outside their store, we spotted hundreds of millions of dollars of opportunity, worked with them to update the way they understood their customers and marketed to them, and at the end of the day, the returns were staggering.”

Another example of using the huge amounts of transaction data in their command involved a global specialty apparel retailer who was trying to expand from outlets into mainstream malls.  Mantis explained that using their data, MasterCard was able to spot which malls and potential new locations their ideal customers could be reached. “We connected the two and really gave them a much better way to expand their footprint intelligently.”

Governments, as well, can benefit from transaction data, explained Mantis – particularly where tourism dollars are concerned. Mantis explains that using transaction data, they are able to create benchmarks on how particular locales compete with other destinations, and uncover consumer trends and behaviors that these locations can use to exploit current trends that help them market more effectively to potential travelers.

With all this data being used to reveal consumer behavior, Mantis says that it’s a misconception to think that all this big data amounts to “big brother.”  “We work purely on anonymized and aggregated data.”