Data, data, data… It sometimes seems like that’s all people talk about nowadays. Data is becoming increasingly useful for some professions, like medicine and insurance, but why do retailers need our data? What are they doing with it, and what’s in it for us consumers?
Our recent research report with Fospha sheds light on the relationship between retailers and consumer data: what they’re looking at, how they ago about acquiring it, how this is set to change retail going forward.
We gleaned our insights from a global survey of 235 senior brand-side marketers, representing both ecommerce only and ecommerce with brick and mortar retailers.
Anyway, enough context, we know you’re all here for the results. In short, they were mixed. If you’re a pessimist then you might be slightly despondent — the bottom line is that the majority of retailers aren’t effectively using their data.
However, those with a more optimistic mindset will see this as a wonderful opportunity going forward — and this is the opinion we’re taking.
If retailers can nail their data strategy, they’ll have more engaged and loyal customers. It’s as simple as that.
Content produced in collaboration with Fospha.
Check out these findings on the use of data in retail businesses:
On the state of retail
- 86.8% of ecommerce only businesses expect to see an increase in sales from their website, while 82.6% of ecommerce with brick and mortar expect to see an increase.
On understanding the customer journey
- Only 27.5% of ecommerce only and 36.4% of ecommerce with brick and mortar retailers are actually collecting their customer data.
- A mere 8.7% of ecommerce only and 12.1% of ecommerce with brick and mortar retailers think they’re using their customer data ‘very effectively’.
- Just 39% of ecommerce only businesses stitch together customer journeys, while 16% of ecommerce with brick and mortar businesses say it is not a priority for their business.
Why is customer data so important in retail?
Can you imagine pulling up Amazon and seeing every type of product under the sun displayed on your homepage? No, I’ve never bought a banana protector, and I don’t intend on doing so now or at any point in the foreseeable future.
We’ve become so used to Amazon’s personalization that the platform would just seem wrong without it. I love the fact that when I go onto Audible they recommend me books based on what I’ve previously listened to – it makes the whole buying process so much easier.
Nobody wants to trawl around searching for things they might like; the whole point of using data in retail is to improve consumer convenience. Done well, personalization can make your every purchase feel like you were accompanied by the most attentive of personal shoppers.
This, in turn, has the ability to drastically increase a consumer’s brand loyalty, something which is definitely front of mind for retailers — 53% of ecommerce only businesses said it was a major goal, with 54% of ecommerce plus brick and mortar brands saying the same thing.
If retailers are going to nail their marketing strategy then they also need to pay more attention to attribution. By analyzing each touchpoint in a customer’s journey to conversion — the various different channels they used — and attributing an appropriate weight to each, they can prioritize those touchpoints which have the largest return on investment.
This is an area which retailers desperately need to improve upon, with 23.2% of ecommerce only respondents and 12.1% of ecommerce plus brick and mortar retailers paying close attention to their customers’ paths to purchase.
Right, enough of all the numbers — here are our four top tips for using data to transform your retail business.
How to use data to transform your retail business:
1. Connect your data
Just as a couple of randomly-selected words doesn’t make a coherent sentence, so you can’t simply expect disparate pieces of data to speak for themselves. This is why you need to connect all your fragmented data into one unified customer data platform. Once they’re all connected, you can then work on piecing together the consumer narrative, before using multitouch attribution to understand the precise relationship between each touchpoint.
2. Prioritize trust and transparency
Consumers are increasingly wary of how their data is being used in the wake of the Facebook and Cambridge Analytica scandal — and rightly so. This means that you need to work with a reputable, trustworthy organization when choosing your data technology: one that truly cares about respecting and protecting consumers’ privacy.
3. Identify pain points to build solutions
Don’t just run around like a headless chicken; instead, identify immediate areas that require fixing and focus on solving those first. You don’t need to immediately tackle everything at once (in fact, that’s impossible), so prioritize your initial efforts on quick wins.
4. Supercharge personalization to build brand relationships
There needs to be a reciprocal relationship when customers give you their data — so ask yourself, what are you giving them in return? The data shouldn’t just be for your own interest, you should use it to personalize product offerings, browsing pathways, or anything else that makes a consumer’s journey easier. If you do this, they’ll be more likely to return, and you’ll build a strong relationship that will stand the test of time.
To find out more about why and how data is being used in retail, download Fospha’s full research report here.