How Retailers and Marketers Should Be Utilizing CDPs, and Why They're Currently Failing

Customer data platforms (CDPs) can represent a transformational piece of technology for retailers — if they’re deployed properly. Retail offers an incredible landscape for data-driven personalization. Closing the gap between physical and digital spaces unlocks massive opportunities for one-to-one personalized offers, dynamic margin optimization, and more.

And CDPs can be key. It helps to facilitate these outcomes in a few key ways:

• Data teams now integrate marketing systems once, not continuously. The days of ad hoc data requests are largely over. CSVs for campaign targeting have been rendered obsolete.
• Customer data is ubiquitous and accurate. Core data systems now automatically remain in sync with critical marketing channels, in real time.
• Non-customer data (e.g., product catalogs, propensity models) are similarly able to be syndicated in real time, everywhere they’re needed, ushering in new personalization possibilities.
• Testing and iterating, maintaining holdout groups, and reporting for campaigns no longer requires a data analyst to drive it. Marketers can self-serve.

So, when CDPs fail to live up to this promise, what happens? And what can retailers do to prevent these outcomes?

There are five key areas that I encourage retailers to consider as they onboard and deploy a CDP. Left ignored, they represent a significant strategic risk to the project. Properly approached, they’re a great rubric for ensuring return on investment and happy stakeholders on all sides.

• Preparation: Engaging with a CDP requires appropriate preparation. The retailer should have a well-socialized “current” and “future” architecture, with visualized data flows from all relevant systems (e.g., customer profiles, product feeds). This architecture should also include all relevant end channels. The retailer should also work with the vendor to articulate clear service-level agreements around data speed, data lineage, security and uptime.
• Resource: Failing to properly resource a CDP — specifically giving it clear business and technical owner(s) — inevitably impairs the project’s chance for success. Also, make sure the business is ready to produce associated inputs (e.g., creative) that can become new blockers for marketing when data stops being the gating factor.
• Process: Probably the most frequently overlooked element is process — i.e., how will the intended system be used, and what’s the correct workflow for the business? New technology implies a new way of working, and CDPs are no different. Retailers have important decisions to make during onboarding based on current and future goals. For example, where will orchestration occur? Where will reporting happen — basic and bespoke? Who will maintain a data dictionary? What’s the service level being provided by the vendor, and where is the space for collaboration (e.g., Slack)?
• Focus: Technology is bought to deliver business outcomes. CDPs specifically are expected to drive better results through two primary vectors: revenue and opex efficiency. The path to realizing that value demands real focus, specifically making sure the owners of the product have a clear six-month road map for intended campaigns, experiments and modeled outcomes. Lack of focus can have a retailer chasing its tail, continually reorienting, and not actually delivering ROI.
• Politics: Easy to overlook and hard to overcome, any technology’s chances of success are rapidly diminished if everyone isn’t on board. Your vendor should be helping you get buy-in during the sales process, but ultimately, it’s up to the retailer to make sure all relevant functions (e.g., data, engineering, marketing ops, CRM, growth, etc.) understand the value of the new world, and how that value will be captured.

The rise of CDPs has ushered in a new way of working in retail, bridging the gap between data and marketing teams to drive transformational outcomes. As a retailer, simply be prepared, focused, well-resourced, and have a politically aligned process, then let the tech take care of the rest. Before long, you'll be having just one conversation with your customers: the right one, everywhere they are.

Josh Neckes is the co-founder and president of Simon Data, a customer data platform that enables marketers to effectively leverage all of their data to drive personalization and value for their customers.