The Future of Retail: Key Data Trends Driving Customer Engagement
2021 was a pivotal year for data strategy, forcing many to rethink not only how they manage data across operations, but also how they’ll capitalize on data in the years to come. As we look towards 2022 and beyond, below are a few key data trends that every organization should be aware of — particularly those seeking new ways to better understand and engage customers in today’s digital age.
1. Behavioral Data Use Will Reach Maturity
Behavioral data helps explain how end users, customers or shoppers interact with an organization’s entire digital estate, including website activity, what pages or products they look at, and every step to the point of purchase and beyond.
Of course, data is increasing in velocity, volume, variety and veracity with every passing year, reaching an estimated 180-plus zettabytes of data generated in 2025. Overwhelmed by this sheer scale, organizations will shift from collecting more to collecting deeper and higher quality behavioral data. This will help retailers improve product analytics, provide more personalized customer service, reduce churn, and much more.
Behavioral data consumption will also become more intentional due in part to event-tracking solutions like Google Analytics V4, privacy framework changes, and increasing data maturity helping organizations realize that not every behavioral event is worth investing in.
2. New Data Tools Will Require Better Integration
The amount of data tools used within organizations will grow, including more client-side, server-side and semantic layer tools for different functions, such as personalization and testing, data analytics, and more. To reduce complexity, more vendors will work together, creating modern data stacks that enable free flowing data between systems.
3. Chief Data Officers Will Wear Many New Hats
Tasked with transforming organizational structures and building more data-driven cultures, chief data officers will be expected to have competent HR skills alongside technical excellence in analytics and engineering. Skills will include negotiation, communication and conflict resolution to make data intrinsic within organizations.
4. Decentralizing Data Teams Will Become a Must
As use of artificial intelligence and machine learning rises, demand will continue growing for data that’s easy to use and work with. This is driving a need for analysis, visualization tools and data catalogues to help retailers derive meaning from data. To avoid bottlenecks in this process and ensure data is rapidly accessed by people who need it, more teams will decentralize.
5. Demand for Data Talent Will Explode
COVID-19 forced retailers to rapidly deliver digital offerings and better understand their customers. Consequently, there's a growing shortage and competition for skilled data talent, especially for data engineers. Simultaneously, the number of specializations and data roles will increase greatly, prompted by architectural changes in the data stack. In 2022, expect job titles like data governance manager, data product manager, and AI operations manager to become much more common in large businesses.
6. The Death of Third-Party Cookies Will Lead to More First-Party Data
Driven by moves like Google's commitment to phasing out third-party cookies and Apple’s 2021 App Tracking Transparency (ATT) framework, companies will reallocate spend away from legacy advertising, and instead adopt new strategies to engage and understand customers, like building more direct data relationships via loyalty programs, creating more intelligent products, and prioritizing a renewed focus on collecting first-party data.
7. Personalization and Privacy
In 2021, many consumers were incensed with the level of data capture by Facebook (now Meta) and others. Consequently, emphasis in 2022 must shift from knowing everything about customers to simply understanding enough — and organizations must adapt to meet customers' expectations. To adjust, companies will need to balance personalization with data protection and ensure data democratization.
Prepare Your Data Strategy Now
The future of data in retail will require navigating new privacy expectations and rules, while demand for easily accessible rich behavioral data will grow alongside the need for skilled staff and the right modern data stacks to make use of it. Retailers that address these needs now will be poised for success, while those that don’t may fall behind.
Alex Dean is the co-founder and CEO of Snowplow, a company that gives teams complete flexibility and control over how behavioral data is collected, structured, processed, modeled and stored.
Alex is a polymath: a keen technologist with a passion for functional programming, cloud-based architectures and big data technologies. He also has a passion for innovation and organizational change.
Prior to co-founding Snowplow, Alex worked in technology roles at OpenX and in the Business Intelligence department at Deloitte Consulting, as well as strategy roles at Fathom Partners and Keplar LLP.