COVID-19 has brought unprecedented opportunities — as well as huge threats — to retailers, making it difficult for advertisers and marketers to understand what’s happening with consumer spending.
Cardlytics enables advertiser-funded offers within native banking applications. They partner with some of the largest banks in the US and UK including Chase, Wells Fargo, BMA, Lloyds, and Santander, to provide personalized cashback offers to consumers, which drives loyalty for the bank’s incremental sales.
Because Cardlytics is linked to consumers through their bank accounts, they are in a unique position to understand the current shifts in consumer spending behavior. Their network reaches about 140 bank customers in the US.
For his Peer Network presentation, Akkerman discusses the big shifts in consumer behavior and spend based on the work they’re doing with some of the top global brands who drive commerce and growth.
Through their ad platform, Cardlytics has visibility into half of all card swipes in the continental US. This gives the company a complete view into more than $3 trillion in consumer spending each year, which is nearly $6 million every minute.
This is the basis for Cardlytics’ State of Spend report which they debuted this month.
Says Akkerman, “We have a thriving advertising platform channeled into banks’ native apps which sits on top of a rich data set that allows us to make our clients’ offers personalized and relevant while gleaning interesting insights both for specific businesses and the macro economy environment as a whole.”
In March, Cardlytics was already seeing early signs of declining consumer spend in industries like travel within distinct metro areas in New York and California. In response to this, their analytics team created a COVID-19 dashboard that allowed them to understand the week over week state of consumer spending.
Weekly spending from March through the end of April was in decline, reaching a max decline of about 35% across all retail categories.
By the end of April, they began to see the trend in declining spend decreasing, with spending down about 21% at the end of April and about 14% as of this past week.
In-store recovery is driven by the purchase of consumer essentials like groceries and pet supplies. Grocery purchasing has fueled some of this recovery, with grocery prices increasing by about 3% due to disruptions in the supply chain (the biggest monthly increase since the 1970s).
Says Akkerman, “The price of eggs has gone up 16%, so not only do you have people shifting their buying habits online and focusing very much on staples, but the price of those staples is also increasing.”
Cardlytics has seen ecommerce leading the way across nearly all verticals with increases in key categories as follows:
“I think it’s really interesting that we saw smaller DMAs embrace online shopping and ecommerce much faster than larger cities,” explains Akkerman. “Larger cities have more optionality to go in store, because not everything was shut down, whereas once you get out into the suburbs, you didn’t have that kind of optionality.”
To help their advertisers understand rapidly changing consumer spending habits, Cardlytics created a COVID-19 Dashboard with a three-pronged approach that addresses rising, retaining, and returning customers.
Says Akkerman, “For example, while focusing on retaining customers, the dashboards help our brands understand the customers who are spending, which ones are one-time customers, which ones are light shoppers, etc., over different regions.”
Each week, Cardlytics works with advertisers to help them expand their targeting and become smarter about where they want to put their dollars.
The dashboard helps advertisers that have been hit hard by COVID-19 in categories where consumer spending changes have made it necessary for them to pull their marketing spend.
“We will eventually get beyond COVID-19,” says Akkerman. “So, we are helping clients that have pulled spend to be well positioned as consumer confidence and spending return.”
The platform enables these advertisers to continue connecting with consumers by targeting only consumers that are actively spending in a category.
“Our clients are able to provide bank rewards to consumers that need savings right now, so being able to forge that relationship has been helpful. When we do get beyond COVID-19, they will be in the best position — from a marketing standpoint — to regain the foothold that they once with consumers,” says Akkerman.
As we head into the latter half of May, overall year over year spending is down 14%, but there are glimmers of hope — some early signs of recovery. All retail categories are beginning to see their rate of decline diminish compared to the previous weeks.
Cardlytics aggregated statistics across every retail category and created a recovery leading indicator that shows, at an aggregate level, that spending is going in the right direction even for lower ticket and discretionary items like casual dining and apparel.
“We are cautiously optimistic that we will continue to see spending shift more positively in the weeks to come,” explains Akkerman. “We’ll be watching at the state and DMS levels to see how things begin to unfold for advertisers. We’re excited to be partnering with all of our advertisers to help them get through this unprecedented and interesting time within human history.”
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