Identity Resolution Helps Retailers Stay in the Cadence of a Customer Journey
Unwanted inventory and a higher demand for low-cost items forced prominent retailers to adjust their earnings forecast and miss their estimates, causing the cancellation of billions in orders and heavy markdowns. Chalked up by one CFO as a short-term fix to avoid longer-term pain, the strategy nevertheless indicates that many large retailers don't understand their customers as much as they would like.
The moves are reactionary, adjusting to the preferences and behaviors that customers displayed during the pandemic heyday, when there was more spend on high-margin discretionary items. One way retailers can more proactively adapt to rapidly shifting consumer preferences is to develop a deeper understanding of customers through linking together all that's knowable about a consumer. This requires advanced identity resolution.
If indeed the one constant is change, it behooves retailers to stay ahead of changing consumer sentiment. Identity resolution is the vehicle through which a retailer, by tying together every disparate signal about a customer, not only possesses a single customer view, but also can better predict how a customer journey will unfold. With more insight into customer behaviors and better predictive capabilities, retailers can rely less on assumptions about the type of products that might interest customers in the future. Instead, with identity resolution providing a longitudinal view of a customer, retailers remain in lockstep with a customer throughout an omnichannel customer journey and the complete customer lifecycle.
Identity Resolution and the Golden Record
To understand how identity resolution works, consider a typical direct mail campaign that offers a 10 percent discount on overstocked products. Sent to a wide audience, the mailer is both cost ineffective (duplicates) and indiscriminate, introducing friction for customers who may have either already purchased the product (at full price) or for whom the offer is irrelevant. This approach, though, is widely used because many brands stop short at basic matching techniques.
Alternatively, as an ongoing process, identity resolution that uses a combination of deterministic and probabilistic matching links together every piece of first-party data an organization has about a customer. By cleansing, matching, merging and relating every disparate signal about a customer from every martech touchpoint or enterprise system, and attaching these signals to a unique customer ID using persistent keys, organizations develop a deep understanding of a customer that evolves over time. When a change occurs such as a new address, a new device, a new household dynamic, identity resolution helps a retailer attach the behaviors associated with the new proxy ID to the existing attributes and data aggregates associated with an existing customer.
When identity resolution steps are continuously completed the moment data is ingested, retailers have insight into customer journeys that might begin anonymously before becoming known — i.e., linked to an existing unified customer profile. The resulting single customer view is a real-time, accurate "Golden Record" or Customer 360 that includes all identity proxies, all data aggregates and attributes, behaviors, preferences — everything there is to know about a customer.
With a Golden Record that's accessible to every business user and that incorporates signals from every channel, retailers are poised to engage customers with hyperpersonalized interactions that are consistent from one channel to the next. In the direct mailer scenario, identity resolution that produces a persistently updated Golden Record allows for segmentation based on a customer’s precise, real-time movement through a customer journey. If the excess inventory isn’t relevant, or the customer purchased the product, a rules-based machine learning algorithm will include the customer in a different segment, one precisely tailored to the customer’s current journey.
With identity resolution and a resulting Golden Record, relevant interactions are a matter of course every step of the way. By being able to better predict how a customer journey will unfold, and at scale, retailers avoid the necessity of heavy markdowns in the first place. In step with a customer, surprise and uncertainty are replaced by a deep understanding, efficient planning and customers delighted by personalized experiences that recognize them as an individual throughout a customer journey.
John Nash is chief marketing and strategy officer at Redpoint Global, a customer data platform.
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John Nash is chief marketing and strategy officer at Redpoint Global. He has spent his career helping businesses grow revenue by applying advanced technologies, analytics, and business model innovations. In his role at Redpoint Global, John is responsible for developing new markets, launching new solutions, building brand awareness, generating pipeline growth, and advancing thought leadership.