The early advantages for companies that have done well during the pandemic and recession are quickly eroding. To compete moving forward, retailers must be empathetic to the full gamut of consumers they serve. Increasingly, this involves developing a data strategy centered on partnerships, both internal and external, that help you better understand where consumers are and how best to connect with them.
Why data partnerships are vital in retail
Data partnerships were once the purview of large corporations with the resources to build their own infrastructure for managing these relationships, each of which comes with unique technical, security, and privacy requirements. In my experience, companies enter into data partnerships for a variety of reasons from expanding their understanding of their customers to creating comarketing programs to building media businesses. Retailers looking to partner with CPG brands to deliver relevant, personalized content to consumers is a common example of the latter.
What is interesting about the pandemic is that data partnership conversations have become the norm as people see the value and ability to start small in building a stronger, fuller, more complete understanding of consumers. While it’s not possible — or strategic — to enter into a data partnership with every third-party that your brand works with, perhaps you can start by connecting with your internal ecommerce team to gain deeper insight into how your customers are interacting with you and buying your products. This could lead you to shift your content strategy or run custom promotions with your suppliers to capture wallet share while meeting your consumer needs.
Three ways to get started with data partnerships
As we close out a topsy-turvy year, here are three ways to think about data partnerships that can build or increase your market advantage in 2021:
Collect: Does anyone at your company have a single, complete view of the customer? Even at some of the largest retailers, not every team has access to the data they need. Think about the many ways first-party data is collected at your company and inquire as to how your team can gain access to this data to drive relevancy and increase media efficiency.
A quick win here would be the ability to access more data than you had before — browse data in addition to transactions, for example. The most valuable data you have is collected directly from your customers, so the more you use it, the more you’re able to better serve their needs.
Connect: This type of partnership includes sourcing third-party data and external collaborations with media partners, to better understand your customers’ behaviors beyond your walls. Common examples are partnering with the major platforms you advertise on and receiving impression logs for closed-loop measurement, or engaging third-party data companies to help augment your audiences.
A quick win would be connecting to new data and acting on insights you wouldn’t have garnered otherwise.
Collaborate: Data collaboration is the next logical step in expanding your data partnerships to drive a mutual value exchange between two parties. If, for example, you see that most of your customers use VISA credit cards, you may want to compare audiences and assess new business opportunities with them in a secure data environment.
A quick win would be starting discussions with a technology vendor who can help support data collaboration in a transparent, secure manner. Just as you are protective of your data assets, other companies are too. A neutral, third-party technology partner can be the best way for both you and your partners to have confidence that your data is protected and secure. Look for a vendor that can provide control, permissioning, supports foundational technology requirements and is interoperable with the marketing technology platforms you already use.
All three types of data partnership listed above can drive measurable business results, and no one is doing it perfectly. There is no end to the amount of data you can connect. It’s an ongoing process.
As your needs have changed dramatically — not just this year but in the last several — you can’t rely on old data strategies and technology. The companies that work toward a future state of building, owning and enriching a complete view of the consumer through data partnerships will win.