2020 might be over on the calendar, but there’s still much we’re learning and adjusting to as we begin 2021. The pandemic forced retailers into a digital acceleration unlike anything we’ve seen before. Add to that drastic changes in consumer behavior. Needless to say, as we begin this new year, there are many trends retail marketers need to be aware of. However, before we dive into the trends, let’s establish a foundation.
The key to powering the digital acceleration retailers are experiencing is through data-driven engagement. This involves leveraging first-party and zero-party data to personalize marketing and create excellent loyalty programs. Gone are the days of buying ads and posting on social media; data-driven strategies must be done transparently and in a compliant manner through direct connections with consumers. In 2020, Google announced it was planning to drop cookies from Chrome, and Apple announced upcoming changes to the way data is collected and used in ad targeting. In light of changes like these, retail marketers must develop new strategies that aren’t reliant on cookies or third-party data.
As marketers adjust to the new way of doing things, here are three trends I believe will power the customer experience in 2021.
Personalization is by no means a new term, but rather an ongoing struggle for many marketers. At the end of 2019, Gartner projected 80 percent of marketers would abandon their personalization efforts by 2025. The biggest reason being issues with collecting and leveraging data, which the shift away from third-party data has only amplified. What retailers will begin to see take shape in 2021 is a new way of personalization that isn’t reliant on cookies or third-party data and is more than merchandising or guesswork. This new generation of personalization will unlock the power of first- and zero-party data through machine learning. It will help retailers provide a value exchange in the moment with consumers right on their mobile app, website or in-store.
Email is Still a Key Channel
Don’t discredit the power of email. Back in early 2020, we conducted a global study with eConsultancy on consumer behavior, which revealed that three out of four people in the U.S. said they made a purchase from an email they received. The results also showed email drove 180 percent more sales than display ads. Email is one the best channels for brands to build a direct connection with consumers, which in turn allows them to collect the first- and zero-party data required to power personalization efforts. Through email, marketers can start the value exchange for data — e.g., offering an exclusive offer or discount in exchange for information. Then this data can be leveraged to personalize offers to customers in order to provide them the most relevant experience possible.
Loyalty Marketing Increases
Because of the economic downturn caused by the pandemic, businesses will naturally focus on getting more revenue from their existing customers rather than pursuing new ones. For retail marketers, this means investing in loyalty programs. However, marketers need to build true loyalty programs, not just reward programs. This means advocacy and engagement are viewed as equal to points for purchases. Make the program more than a discount; celebrate loyal customers. Loyalty strategies can be used to optimize customer lifetime values as we continue to recover from the economic downturn.
Every vertical is undergoing some form of a digital transformation. The pandemic only accelerated this. Part of the change is marketers can no longer rely on third-party data or cookies to reach customers. Now is the time for brands to capitalize on the changing landscape and adopt new practices. With these new practices, brands can build personalized experiences that lead to loyal customers.
Related story: How Retailers Leverage the Value Exchange Economy
Richard Jones is the chief marketing officer at Cheetah Digital, a cross-channel customer engagement solution provider for the modern marketer. He oversees a global team that is responsible for all aspects of the brand, demand generation, digital marketing, corporate communications, and sales development. With more than 20 years of marketing, sales and strategy experience, Jones was previously the CEO of Wayin, a global leader in zero-party data collection and activation. There, he helped many of the world’s leading brands such as Daily Mail Group, NHL, Bauer Media, Vodafone, Priceline.com, Reckitt Benckiser, Air New Zealand, and Manchester City FC create zero-party data strategies.