Retailers: Want to Attract New Customers with Great CX? Focus on First-Party Data
We live in a new paradigm triggered by the pandemic. In this reality, consumers demand better, more personalized customer experiences (which they already experience when interacting with leading digital-first companies).
To meet this expectation, retailers must, first and foremost, deliver seamless, personalized experiences across all channels of interaction with their consumers. This includes traditional channels like owned websites, physical stores, call centers as well as social media, connected devices, marketplaces, and live shopping.
Instead of integrating and optimizing each channel, retailers need to shift their strategy so that it is wholly centered on the customer. This shift requires that retailers collect vast amounts of interaction data across various platforms, integrate that data in real time to create a single view of the customer, and use that view to create consistent and personalized experiences.
In addition, with the elimination of third-party cookies in the near future as well as new privacy and tracking rules, retailers need to increase their efforts to collect first-party data. Many retailers have already invested heavily in technologies related to gamification, partnerships, loyalty programs, communities, forums, and user-generated content platforms.
As a result, consumers are demanding more personalized experiences, and they are willing to share their data for them.
Finding, buying, and receiving a product is table stakes in a post-pandemic world. Consumers crave experiences and connections with the products they love and the companies that provide them. They expect retailers to go beyond products and services and enter into the world of experiences.
REI has been one of the pioneers in becoming more experiential, incorporating all aspects of the outdoor experience in their customer interactions.
Similarly, LEGO’s new store expansion and investment in digital transformation highlights its need to collect first-party data and provide a medium to experience LEGO. IKEA hosted a virtual festival where celebrities performed, cooked, or spoke from their own homes to showcase IKEA products.
Even fast food restaurants are evolving beyond their historical boundaries. Burger King is experimenting with collectible NFTs to engage consumers with the brand. Keen has taken this a step further, linking their loyalty program with volunteering called Keen Corps.
Migrating to experiential retailing can lead to large improvements in conversion and more importantly, in retention. MUJI, a global retailer, merged its physical and digital experiences with real-time inventory data to provide personalized experiences in stores. PARCO has used its CDP to “gamify” walks through its malls and more than 3,000 stores. And lastly, Subaru used its extensive data reach to nurture the entire customer experience of owning a Subaru. The company formalized this shift by setting its goal of migrating from “a company making things, to a company making people smile.”
These initiatives increase the sources and complexity of data generated by consumers. There should be no expectation from consumers to provide consistent identifiers repeatedly—be it email address, phone number, or loyalty ID. That responsibility falls on retailers, which need to minimize consumer friction and emphasize the value-add of the experiences offered.
A centralized customer data foundation (often a customer data platform or CDP) is what makes these initiatives possible. The right CDP provides a flexible, ideally schema-less methodology, making it easy to add new sources of customer data over time.
In addition, the data unification methodology of the CDP needs to create a 360-degree view of the customer. Deterministic matching is no longer enough with different types of data coming from different sources with different identifiers. Probabilistic matching and fuzzy matching need to be incorporated to accommodate these shifts.
Supporting services like address standardization and data hygiene like nickname validation are required to ensure proper customer identification. This methodology also needs to be adaptable over time to allow for identity resolution changes that can be applied retroactively without the loss of the original data. Merging accounts that are not the same individual or household or not merging accounts that are, create gaps in the full understanding of the customers’ interactions with the brand.
A centralized customer data foundation lets retailers exceed customer expectations by making all of their current customer-facing tools “smarter.” Learn why global retailers use Treasure Data CDP to deliver exceptional customer experience and boost their bottom line.