Why Merchants Save Their Best Offers for Checkout

Merchants have plenty of ways to target shoppers with promotions. Their problem is getting the right offer in front of the right customer while there is still a purchase to influence.

That gap shows up clearly in “The Smart Basket Opportunity: How Merchants Can Capture More Consumer Spending,” a July 2026 report produced by PYMNTS Intelligence in collaboration with FIS. The research, based on a survey of 60 grocery, retail and restaurant and food service merchants, finds 65% say access to data moderately, significantly or critically limits their ability to run personalized promotions.

The constraint is striking because many merchants do not consider their underlying data capabilities weak. More than half describe their access to actionable promotional data as advanced or highly advanced, while another 40% call it moderate. Yet only 27% say they can deliver one-to-one offers in real time. Another 40% remain focused on mass-market or segment-based personalization.

That leaves a gap between possessing customer data and being able to use it during an individual transaction.

The report finds another version of that disconnect in merchants’ promotional results. Personalized or targeted offers are used by 73% of merchants, making them the most commonly deployed promotional mechanism in the study. But just 48% of merchants using them rate them as their most successful mechanism. The 25-percentage-point difference between deployment and reported success is larger than for any other promotional mechanism surveyed.

The issue for merchants, then, extends beyond collecting more customer information. Their existing systems need to make that information actionable quickly enough to affect the basket.

Moving Personalization Into the Transaction

Smart checkout offers one potential way to close that gap. Under the model studied by PYMNTS Intelligence and FIS, a shopper’s basket is evaluated in real time at the point of sale. Eligible product-level offers, loyalty rewards and brand-funded incentives can then be identified, optimized and applied automatically without requiring shoppers to activate them beforehand.

That approach builds on behavior merchants already have in place. Checkout-integrated promotions are the most-used promotional channel among merchants surveyed, at 58%. Payment and checkout channels also lead when merchants are asked which promotional channels perform best, cited by 37%, compared with 25% for media and third-party channels and 20% for merchants’ owned digital channels.

Merchants’ spending plans point in the same direction. Asked where they expect the largest increase in promotional budgets over the next three years, 25% chose embedded, real-time checkout optimization, ahead of personalization and data-driven targeting at 20%, digital wallets and tap-to-pay offers at 17%, and AI or large language model shopping interfaces at 13%.

Most merchants want control over how promotions are constructed. Eighty-three percent say they would participate in smart checkout if they can determine eligible products and establish the rules governing offers. Margin protection is the most commonly cited guardrail, followed by visibility into incremental sales or ROI. Merchants also cite limits on partner data use, transparency into offer rankings, rules governing how offers stack and the ability to pause or leave the system.

Data sharing carries similar conditions. Seventy-seven percent say they are very or extremely willing to share transaction signals and performance data with payment platforms, more than with any other partner category tested. But 60% want a clear connection between the data they provide and resulting sales or conversions, while 53% want transparency into how that information is used and by whom.