E-commerce retailers are equipped with a range of tools and technologies that enable them to build detailed prospect and buyer behavior profiles for improving engagement. This gives them a significant advantage in terms of re-marketing, nurture campaigns, and promotional strategies over brick and mortar (B&M) merchants, which have historically struggled to personalize the in-store experience.

Traditional loyalty programs have shortcomings, and many in-store shoppers can and do remain anonymous, making it seemingly impossible to gain insight into their shopping behaviors. But because of modern Payments Intelligence technology, this no longer has to be the case.

To further discuss the challenges B&M retailers face to personalize the customer experience and how Payments Intelligence technology can be used to level the playing field with e-commerce merchants, PaymentsJournal sat down with Scotty Perkins, Senior VP of Product Innovation at Quisitive LedgerPay, Dan Devlin, Quisitive LedgerPay’s Senior VP of Operations, and Raymond Pucci, Director of Merchant Services at Mercator Advisory Group.

Online merchants have an advantage over brick and mortar retailers

As discussed in a previous PaymentsJournal podcast, online retailers have a significant advantage over B&M merchants in terms of promotional strategies. Consumers making online purchases typically log into a merchant’s property and provide information including an email address, phone number, and delivery address.

“There is information surrounding e-commerce transactions that consumers naturally provide because the merchant simply needs it to execute a transaction, with a shipping address and phone number being perfect examples. However, this isn’t the case for B&M transactions.”

Scotty Perkins

Because there is no expectation for consumers to provide this type of information at the point of sale, B&M stores have less data and, as a result, a shallower understanding of their customers’ behavior. Understanding customer behavior is crucial to create compelling personalized offers and build brand loyalty.

Loyalty programs help, but aren’t enough to bridge the gap

A major way B&M stores capture customer data is through traditional loyalty programs. While loyalty programs have been instrumental and valuable to retailers looking to offer personalization, they capture only a sliver of the customers making purchases in stores.

Devlin noted that while it varies by market and vertical, “the statistical adoption rate of store loyalty programs in general hovers between 1-2% among retail verticals, meaning up to 99% of customers go unknown.”

The low adoption rate of loyalty programs and their high-friction design—customers typically have to opt in, carry an identifier, and remember to use that identifier when making a purchase—make them cumbersome and ineffective at gaining widespread penetration and scale.

B&M environments can relatively easily determine what items were purchased during a specific time period at a given location, but the massive proportion of customers not enrolled in loyalty programs makes it much more difficult to gain insight into the type of customers making these purchases. This forces them to make generalized decisions regarding promotions and marketing, in the hopes that it will drive up revenue.

As a result, there is plenty of room for improvement when it comes to how B&M merchants capture and leverage customer data to improve the customer experience. And as Pucci pointed out, “it’s even more important now, as we are unraveling or unwinding the [COVID-19] shutdown and more brick and mortar stores open to full capacity, that they have the best tools and resources at their disposal for customer intelligence.”

Addressing the blind spot of B&M merchants

Difficulty to personalize the in-store customer experience combined with the low penetration rates of traditional loyalty programs have created a huge blind spot for B&M merchants. The blind spot leads to a strategic gap when it comes to optimizing operations, streamlining costs, improving category mix by region or store, driving loyalty, and maximizing revenue.

To address this blind spot, B&M merchants need to have the ability to associate shopping behaviors or preferences with individual customers. “If we have a mechanism—and we believe we do—to actually illuminate that behavior on a very personalized level and create a purchase history for consumers without compelling them to enroll in a loyalty program, it increases the breadth and validity of the data that can be captured,” said Perkins.

Introducing the LedgerPay platform

No matter what category a retailer falls under, Payments Intelligence technology can be utilized by merchants to gain a new level of visibility into customer behavior beyond those enrolled in a loyalty program. One such technology solution, LedgerPay’s payment processing and payments intelligence solution, eliminates this blind spot by enabling merchants to accurately predict, influence, and reward individual consumer behaviors through compelling personalized offers.

In addition to providing retailers with the information needed to make relevant decisions for consumers without the consumer having to actively participate, LedgerPay works in real-time. This means that relevant promotions can be displayed to a consumer visa point of sale terminal, a cashier that can offer the promotion, or on the consumer’s receipt. Being able to access this flow of information when it’s happening offers immediate value to merchants and customers alike.

The motivation behind the LedgerPay platform is simple: helping merchants offer a better customer experience. “We are not trying to create a world where we can disintermediate that merchant from the future,” said Perkins. “Some retailers have found that the products they’re selling via Amazon have been substituted by an Amazon product, and that’s simply not a component in our business model.”


B&M retailers have long struggled to provide the customized customer experiences, incentives, and promotions that are commonly used by e-commerce merchants. Further, traditional loyalty programs fall short in reducing the gap between these types of merchants.

The LedgerPay payments intelligence platform levels the playing field between brick and mortar and e-commerce merchants. By providing a real-time technical mechanism that lies right in front of the merchant, LedgerPay is the closest substitute for brick and mortars to gather the same relevant customer information as their e-commerce counterparts.