3 Common Data Strategy Mistakes Retailers Are Making
Change and disruption is rife in retail. Gaining and sustaining a competitive advantage means delivering timely and relevant customer experiences at every touchpoint. In fact, 70 percent of consumers spend more with companies that offer fluid, personalized and seamless customer experiences. Yet despite most retailers being data rich, data strategy mistakes are making them insight poor — and unable to deliver on consumer expectations as a result. So, what are those mistakes and what should change?
Reliance on Legacy Processes and Technologies
One of the biggest challenges facing retailers is outdated tech stacks. Complex customer journeys that span online and offline touchpoints create silos of data across multiple systems that each have their own unique way of storing data and recognizing consumers. As a result, marketers, e-commerce, customer experience, and other teams on the front lines of customer engagement have to wait on internal IT teams or costly external agencies to query and normalize the data before it’s ready for use.
“Retailers want a seamless experience for their customers, but they don’t have a seamless internal experience for their technologists,” notes Melissa Minkow, director of retail technology at digital consultancy CI&T.
Modernizing tech stacks means adopting a purpose-built solution that collects first-party data from across systems, channels and sources, unifies it for a single view of the customer, and then makes it easily accessible to teams and their tools to improve how they understand and interact with consumers. Only then can retailers orchestrate bespoke, end-to-end experiences that foster lasting value among customers.
Taking a ‘Wait-and-See’ Approach to Third-Party Data
While Google may have delayed its third-party cookie ban until 2024, waiting to see what’s next is not a solid strategy. Google’s FLoC (Federated Learning of Cohorts), which was supposed to offer an alternative to cookies before it was ditched for "Topics," shows that even the tech giants are struggling to get it right. Then there's a broader reckoning with the reality that third-party data historically hasn't been very well aligned with consumer privacy in general and presents several issues in terms of consent and compliance with privacy regulations like GDPR and CCPA.
Retailers that are still reliant on third-party cookies need to focus on creating mutual and ongoing value exchanges with customers that offer a path to build their first-party data assets. Even small value exchanges, like loyalty rewards, promotions and tailored product recommendations, are subtle improvements that retailers can use to encourage opt-in.
Missing Opportunities to Foster Customer Loyalty
To keep up with increasingly digitally savvy consumers, retailers need new ways to understand and interact with consumers by offering innovative and valuable digital products and experiences.
For example, many furniture retailers are now using augmented reality (AR) to create virtual experiences on their websites so consumers can see how a couch, coffee table or bookcase might look in their own living room. Others, like Mattel, are launching new digital channels that focus on a specific consumer segments as a creative way to open up new revenue sources and meet their customers where they are. Even brick-and click-retailers are redesigning their store locations to include digital screens, mobile associates and point-of-sale units.
Through these digital products and experiences, retailers can enhance their ability to collect first-party data from shoppers, and then utilize that consented data to deliver unique and hyperpersonalized interactions that enrich their engagement and deepen their loyalty.
Delivering exceptional, data-driven customer experiences is the future of retail. By addressing the data mistakes above, retailers can create more meaningful relationships with consumers and a more solid and lasting growth trajectory for their business.
Anne Curtin is the director of corporate marketing at BlueConic, a pure-play customer data platform.
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Anne Curtin is the director of corporate marketing at BlueConic, where she is responsible for growing visibility for the company. An accomplished marketing veteran, she has held marketing roles across a range of B2B SaaS companies. When not at work, you can find her on the tennis court, training for a marathon, or spending time with family and friends.