Shopping for Data: What Data Should Retailers Be Collecting?
A number of factors are disrupting the retail industry, from growing supply chain complexities and increasing privacy regulations, to rapid market changes and evolving consumer demands for hyperpersonalization and true omnichannel experiences. To navigate this evolving landscape, more and more retailers are harnessing the transformative power of first-party data to cultivate meaningful customer relationships and stimulate business growth while improving their operational efficiency at the same time.
Yet a recent survey by CommerceNext found that 65 percent of retailers identify data management as their most pressing challenge when trying to leverage first-party data. So, how should retailers rethink their approach to collecting and utilizing customer data?
Check Your Shopping List
Most retailers have significant amounts of first-party customer data sourced from websites, mobile apps, social media, point-of-sale systems, and more. With so much data available, it should be easy to pinpoint who their ideal customer is, what they're interested in, and how to deliver the personalized, omnichannel experiences they expect. But the reality is often far more complex. The sheer ubiquity and volume of data at their disposal can make it difficult for teams to identify meaningful patterns and insights, much less use it effectively to improve marketing strategies and business outcomes.
Gaining alignment on the questions you're looking to answer can help uncover what data you actually need in order to accomplish your goals. A well-defined use case that describes the current state, target outcome, supporting activities, and relative complexity can make it easier to prioritize what data is required (and what’s not). Moreover, having a good understanding what data is truly essential and the purposes it serves can help reduce the risk of privacy violations and potential liabilities associated with mishandling or misusing personal data.
Unlock Your Transactional Data
Access to transactional data is a foundational component of any modern data-driven retail approach. When harnessed effectively as part of a first-party data strategy, it enables retailers to create personalized customer experiences, optimize inventory management, fine-tune pricing strategies, enhance supply chain efficiency, and more.
However, many retailers store transactional data in an IT-owned ERP system or remain heavily reliant on event-stream data that limits the view of customer behaviors to a 90-day window, limiting opportunities to access and use this data.
By consolidating and unifying transactional data with other individual attributes, interests and behaviors in a centralized system, such as a customer data platform (CDP), retailers can get a comprehensive understanding of each customer and use that insight to improve various aspects of their operation.
For instance, retailers can leverage data on past purchases to support both short- and long-term lifecycle marketing strategies. Examples include ensuring customers never see ads for product they already bought and exposing them to ads for related or complementary products instead, or sending promotions for items like a toddler bed to a customer who bought a baby crib two years ago. Furthermore, retailers can leverage this same data to alleviate out-of-stock or backorder frustrations by offering algorithm-driven product alternatives when customers are in the process of creating orders.
Increase Your Data-Driven Sophistication
In the pursuit of leveraging their first-party data, retailers often succumb to the allure of a "big bang" approach to business transformation, overlooking the benefits of a more iterative approach. By focusing on quick wins, retailers can ensure that their data-driven strategies deliver results sooner while building internal momentum and support for broader, longer-term data-driven transformation initiatives.
Imagine what could happen if you were able to integrate just a single additional data source into your next promotional campaign. What actions would you want your target recipients to take? Would your targets change? This “walk, crawl, run” approach to data utilization is considerably more effective than implementing net-new, overly complicated use cases that require years of outdated customer data and breed downstream activation issues.
Maximizing Data Impact
Ultimately, retailers should scrutinize each data point they capture and ask why it's essential. Does it serve a higher purpose in enhancing the customer experience or streamlining retail operations? The true value of data lies not in its volume, but in its strategic application to enhance marketing strategies, improve operational efficiencies, and drive tangible business results. If it’s not actively contributing to these objectives, it may be advisable to leave unnecessary data points on the shelf.
Khurram Moiz is lead principal customer success manager at BlueConic, a pure-play customer data platform.
Khurram Moiz, Lead Principal, Retail Customer Success, BlueConicKhurram has spent the past 12+ years driving strategic customer-centric, media optimization, and analytics capabilities for Fortune 100 companies across retail, consumer products, food and beverage, and financial services. As a Lead Principal Customer Success Manager at BlueConic, he is tasked with guiding and enabling customers as they navigate through their own digital transformation journeys.Having worked client-side and as a prior strategy consultant, Khurram has first-hand experience with martech and audience intelligence capabilities that serve cross-functional teams. Off the clock, he is often found outdoors with his scouting family around metro Atlanta and usually in the middle of an intense deep dive on Marvel superheroes with his kids.
