Modern retailers and brands face unique challenges involving supply chain availability, labor shortages, and increasing overhead costs, as well as broader uncertainty throughout the global economy. As businesses across industries develop ways to adapt amidst ever-changing market factors, retailers and CPG (consumer packaged goods) companies are under pressure to maintain market share and invest in innovation (e.g. sustainability, digital experiences) — all while satisfying the demands of their customer base.
As the saying goes, however, necessity is the mother of invention. For companies in the retail space specifically, it’s vital to seek out technology solutions that can bring them closer to their customers while setting them up for long-term business success.
The most forward-thinking organizations today have already invested in receipt scanning OCR (optical character recognition) technology, also known as receipt OCR software. This technology automatically turns the information contained on receipts into reliable first-party data that can build consumer insights, drive marketing strategies, deliver promotions, and more.
While often overlooked, with the right tech tools in place, post-purchase receipts can offer an in-depth snapshot of exactly what products customers are purchasing — in addition to when, where, and how much they’re buying. Receipts also tell the story of which promotional offers and discounts consumers are redeeming.
In this blog, we’ll look at how receipt OCR works, provide a brief history of the technology, and reveal the benefits it can unlock for your organization.
How does receipt OCR work?
In simplest terms, receipt OCR technology can take a digital image of a receipt and transcribe the information into digital text. The extent to which it can do so varies, as receipts are complex, diverse documents that differ across retailers, brands, geographies, and beyond.
On top of that, there are other intervening factors that can influence the performance of a receipt scanner. For physical receipts, it can be whether the document is crumpled or otherwise damaged, affecting overall image quality, or the richness of the image capture features and functionality via mobile phone.
In addition to receipt format and quality, there is also the vast number of consumer products to consider, which are uniquely coded or abbreviated on a given receipt, adding complexity to an already-complex retail landscape.
Receipt recognition technology has a long history that dates back before the emergence of digital receipts. Nowadays, many businesses provide both paper and e-receipts, with the latter helping to promote sustainability. Some merchants don’t even provide itemized receipts, but rather aggregate order history and purchase data in a section of their website or mobile app under the user’s account.
While several organizations are beginning to invest in more paperless technology, it’s likely that physical receipts will be utilized in most stores for the foreseeable future, especially when considering the varying degrees of digital maturity around the globe. Due to this, it’s important to invest in an all-encompassing receipt scanning solution that can integrate into existing applications — whether that’s via web API (also referred to as receipt API) or native mobile SDKs.
Considering all of the above, it’s safe to say that an optimal scanning solution should be capable of reading diverse purchase data types — from paper receipts to e-receipts to online accounts.
What are the benefits of receipt OCR?
There are legitimate benefits for businesses, both large and small, to implementing receipt extraction software into their existing applications.
The ideal, easy-to-implement receipt scanning solution can provide businesses with first-party purchase data that was previously unavailable to them. For example, consider some of the leading CPGs that are increasingly investing in their own mobile apps. Through these apps, which integrate receipt scanning OCR technology, consumers can snap a photo of their receipt and receive eligible rewards (cashback or points) for their qualified purchases within that CPG’s brand portfolio.
Through this exchange, shoppers are rewarded for their loyalty, wherever and however they shop for products, while the brand is able to boost consumer engagement in a new and digital manner — gaining a more complete picture of what shoppers are buying along the way. For instance, the CPG can see that a shopper purchased a competitor’s yogurt alongside their cereal and offer a promotion for their brand’s yogurt the next time the customer heads to a grocery store or big box retailer.
First-party purchase data can also be utilized by corporate marketing and merchandising teams to promote various high-selling products or determine when the best time to have certain sales might be. This information can also be combined with any existing loyalty or rewards program to provide regular customers with added benefits like points or discounts on future purchases.
The best receipt scanner software can extract purchase data, no matter what format or retail codes are used, and do so in an intuitive and unobtrusive fashion for consumers. By providing businesses with a constant stream of reliable first-party data, receipt scanning technology enables an organization to quickly validate purchases, engage customers, and, most importantly, build loyalty.