Why 2022 is the Year of First-Party Marketing for Retailers

With the ad industry phasing out cookies and third-party trackers, data and privacy concerns and regulations taking center stage on a global scale, and a plethora of logistical issues like labor shortages and supply chain backups impacting inventory, retail brands have had to completely rethink how they approach marketing.

Despite all of these challenges, however, retail marketers have plenty to look forward to this year. Why? Because first-party marketing has finally come to the forefront and no other industry is poised to excel in this environment as much as retail.

First-Party Data = Marketing Gold

First-party data has become like gold for marketers looking to provide consumers with the personalized experiences and messaging they've come to expect without the creepy third-party tracking that made it possible in years past. And retail brands, perhaps more than any other industry, have access to an abundance of first-party data because they're so close to the point of sale (POS) — customers share information in exchange for a product.

The smartest online retailers know this already, which is why they often ask you to sign up for an account to make a purchase (because it makes it easier for them to build a profile to understand your preferences). Once a customer makes a purchase, the retailer can start to know more about their behaviors, what they're buying, what other products they might be interested in, etc. Retailers can then capture and use this type of first-party data to build loyalty, future-proof their marketing strategy, and drive revenue without ever having to rely on intrusive tracking that plagues other industries.

Shifting Budgets

The digital marketing industry is facing a lot of issues right now. Google, for example, has been getting scrutinized recently for its latest plans for a “privacy-safe” cookie replacement that some argue is far from that. Facebook stock is dropping after a less-than-stellar earnings report showed a decrease in ad spend across its platforms. CPM costs are rising all around. That’s why many marketers, especially in the retail and CPG sectors, are shifting budgets to other channels.

It’s no wonder why Amazon, Target and Walmart all have booming advertising businesses now (again, they're close to the POS and have their own valuable data to offer advertisers). And while these offerings from the major players will continue gaining traction, many retailers are starting to use their own first-party data in creative ways to deliver personalized messages that resonate without relying on anyone else (like the tech giants).

Creative Ways to Drive CX

Marketers typically spend so much time, money and energy getting consumers to the purchase stage, but what comes after the purchase is just as important. Traditional digital ad channels and strategies may help drive a sale but they don’t necessarily impact lifetime value or loyalty. Yet in today’s challenging retail landscape (filled with supply chain disruptions, inventory woes, and lots of online competition), loyalty is what makes or breaks a brand.

And what builds loyalty? Positive customer experiences. And how are leading retailers creating positive experiences? By taking advantage of their first-party data to personalize every interaction.

For example, one way retailers are starting to leverage first-party data to drive better experiences and ultimately loyalty is through personalized unboxing marketing. For the first time, brands are turning their e-commerce packages into a fully personalized and targeted marketing channel. New technologies make it possible for targeted marketing messages to be printed within each outgoing package (with little or no effort from fulfillment teams). Think suggested products, loyalty rewards information or other forms of personalized content. Now, a message within a package can become more like a digital advertisement, with options for A/B testing and different messages for different audiences — all driven by first-party data.

Research shows that almost 60 percent of revenue for direct-to-consumer brands now comes from recurring customers (as opposed to new ones). Now is the time for retailers to start laying the groundwork and future-proofing their brand by focusing on driving loyalty and experience with first-party marketing.

Ryan Millman is the founder and CEO of UnDigital, a provider of personalized unboxing technology.