Welcome to the most transformative period in marketing history. As privacy regulation expands more and more retailers are taking a hard look at their internal capabilities, tools and strategies. In this extension of another article on retail in the privacy era, we look at four key areas retailers should embrace to enrich their first-party data sets to drive more engagement and revenue.
In this blog
It's no doubt that the privacy era is one of the most transformative and evolutionary periods in marketing history. As privacy regulation expands more and more retailers are taking a hard look at their internal capabilities, tools, and strategies. Linkedin reporting shows that the most sought-after marketing roles for 2022 are marketing automation specialists, content writers and strategists, data analysts, paid media specialists and SEO experts. And on the technology side, the Martech landscape has grown significantly over the past few years in response as well. The Martech SaaS industry is booming. Over the past 10 years the number of tools on the market have grown by over 5,000%.
What it all means for retail marketers
In short, customer data is valuable. And privacy transparency is not just a reasonable ask but, in this day, and age, it's an expectation. This newfound complexity in acquiring data and targeting customers is a good thing. But retailers have an edge when it comes to data capture - the shopping experience. This is the opportunity retailers need to embrace to enrich their first-party data sets. Customers want to trust the brands that they engage with and are challenging retailers to do several things:
Focus on current customers
Everyone wants more customers, right? But, what about the ones you already have? Why prioritize new customers when you can grow the value of your existing customers? Retailers should focus their efforts (and budgets) on utilizing first part data to better understand the customers they have. Increasing basket size with current customers is more valuable than trying to create new ones.
Customers want value in exchange for their data. Understanding how to use first-party data to provide meaningful content and create real value for a brand in a customer's life is a winning situation. For example, if you know your customer's purchase patterns you could send them reminders on when it's time to restock certain items. Another way to provide value could be to provide recipes that include items that they purchase regularly.
One of the best strategies is to identify segments within target audiences to deliver more tailored messaging. Segments can consist of everything from demographics to customer spending or even user behavior. These audiences can be segmented even more if you can gain insights into your customers' psychographics. Information such as their personality type, values, and beliefs are priceless. An example of targeting at this level might be knowing if someone prefers organic products vs non-organic products. Or, if they have dietary restrictions.
Utilize user behavior to make your digital experiences and product offerings better. As convenience drives more and more purchase decisions, retailers need to dig deep into customer purchase data to understand how it affects merchandising, product offerings, and even business models. For example, customer purchase patterns may give light to subscription-based offerings or memberships.
Tracking will soon be even more difficult as the third-party cookie sunsets and consumer awareness and adoption of the other privacy-first features increase. Google, Facebook, Apple, and everyone else aren't just stepping up to be the good guys. The fact is they are all doubling down on new methods that operate within the confines of regulation for their own interests. The ability to track across their platforms and others are limiting. Retailers need to focus on shoring up their MarTech stacks and building out insights from the data they own. All the while being creative with data collection to maximize the ability to enrich their customer profiles and keep the growth flywheel spinning.