In a move that has divided
opinion, MasterCard has signed up with loyalty scheme Next Jump in
an e-commerce venture that could unlock a treasure trove of
customer data to online marketers. Charles Davis reports on how
MasterCard plans to start sharing information on
cardholders.

 

In a sign that predictive online
modelling is here to stay, MasterCard has teamed with an Internet
company that specializes in personalised shopping to roll out a web
shopping mall called MasterCard Marketplace which predicts what
cardholders are likely to purchase and makes suggestions.

The ambitious new venture employs
technology from loyalty programme Next Jump, which draws on buying
patterns across thousands of retailers andms of customers since a
bigger sample size allows better analysis of buying trends. Knowing
that data is out there – who is spending how much at which stores –
allows MasterCard to predict which items appeal to which shoppers,
turning browsers into buyers. Charlie Kim, Next Jump’s founder,
says its strategy converts one in every 11 browsers into buyers –
far above the online retail industry standard. Next Jump runs
employee discount and reward programs for many big companies. For
more than a decade, it has gathered mountains of data to help
refine its algorithms for predicting what people are likely to
buy.

The strategic agreement will allow
the companies to work together to harness their combined assets in
the payments technology, e-commerce and digital marketing sectors,
and gives MasterCard access to Next Jump’s extensive aggregated
e-commerce network.

 

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By GlobalData

Discount
offers

MasterCard MarketPlace provides
discount offers and free shipping options from a network of
thousands of participating merchants across a wide range of
categories including apparel, jewellery, electronics and children’s
clothing. MasterCard cardholders can preview offers, join at no
cost and set preferences for the types of merchant offers they want
to receive. Cardholders can also choose to receive email
notifications for offers from specific merchants as well as
exclusive in-store shopping events at preferred merchants.

The platform offers consumers the
ability to personalise their online shopping experience, by setting
preferences and email notifications from specific merchants that
they like and gaining access to exclusive in-store events at
preferred merchants. The best customers are rewarded with lower
prices and/or VIP access to newest, hard-to-get, sold-out products.
Consumers that either spend more or have greater influence in
getting others to shop are considered the best customers and are
therefore rewarded accordingly.

“Our new alliance with Next Jump
will allow MasterCard to make game-changing advances in the online
channel, which is ripe for innovation in a way that allows
consumers to have a simple, seamless, secure and valuable
experience wherever they are in the world and through whatever
device they access the internet,” said Josh Peirez, group executive
of innovative platforms for MasterCard Worldwide. “The deal is a
result of our approach to innovation that is based on deep analysis
of the landscape looking at areas of opportunity and identifying
leading technologies to help us best meet our customers’ evolving
needs.”

 

Massive
potential

Headquartered in New York City,
with subsidiary offices in Cambridge, Massachusetts and London,
Next Jump has created a powerful technology engine fuelled by data
from more than 28,000 merchant partners, both retailers and
manufacturers, with a potential reach of more than 100m users. Next
Jump acquires its users through a B2B model, with over 90,000
corporations, affinity groups, and institutions including more than
85% of the Fortune 100 and nearly 60% of Fortune 500 companies.

“Next Jump has a unique model that
benefits both merchants and consumers,” said Charlie Kim, founder
and CEO of Next Jump.

“For merchants, Next Jump enables
sales as a trusted partner – we never compete with them. Our
technology allows merchants to re-direct ad spend towards better
pricing in return for guaranteed sales. The merchant analytics from
this model are incredibly impressive, allowing merchants to step up
or down their participation in the program.”

The animating idea behind
MasterCard Marketplace is that by better understanding consumer
tastes, MasterCard could increase the likelihood that cardholders
will make purchases and drive up transaction volume, an attractive
proposition for issuers in light of regulations threatening banks’
card revenues.

MasterCard, which has signed a
three-year partnership agreement with Next Jump, said the shopping
portal is the first of several targeted marketing products it
expects to roll out this year using Next Jump’s analytics
technology. MasterCard and Next Jump are already working on a
mobile-app version of the shopping portal.

To use the MasterCard MarketPlace,
consumers must enroll their MasterCard debit, credit and prepaid
cards. To highlight offers most relevant to specific cardholders,
Next Jump collects information that pares down the brands, product
categories and price points that interest them.

The site lets users specify their
“likes” and “dislikes,” as well as how much money they are willing
to spend for certain brands, said Charlie Kim, Next Jump’s founder
and chief executive.

Participants can also opt in to
receive alerts about special promotions. In addition to the
personalisation engine, MasterCard MarketPlace has a recommendation
engine that helps users see the most popular items and deals in
their area.

The merchant analytics from Next
Jump’s e-commerce model also permits merchants to redirect their
advertisement expenditure towards better pricing in return for
guaranteed sales.

 

Competitive
advantage

The portal could provide a
competitive advantage for MasterCard, which trails Visa in market
share and even more pronouncedly in debit card share. An active web
shopping service will drive traffic and greater revenue.

Other card providers and issuers
have started created online shopping portals for their
cardholders.

Visa last year rolled out Rightcliq by Visa, a shopping tool
that helps connect consumers with retailers. American Express has a
site called ‘Daily Wish’ that offers discounts on targeted
products.