An outdated data strategy is most evident in broken customer experiences. An ad that goes to someone who already bought what you just paid to show them. A lack of recognition for a superfan who comes into your store and normally shops online. Or simply a product being unavailable when a customer expects it to be on the shelf. It doesn’t have to be that way. Now is the time to uplevel your data strategy, not only to better serve your marketing team and their ability to provide seamless welcoming experiences, but also to benefit your entire organization.
Balancing offensive and defensive data strategies
In revamping your data strategy, it's helpful to think of the balance your business requires in minimizing risk while supporting growth. A defensive approach to data management focuses on maintaining a single source of truth to minimize risk. This is where the "plumbing" of data strategy comes into play, ensuring that data usage is properly governed and auditable. On the flip side, an offensive approach is needed for activities related to business growth, including but not limited to boosting customer satisfaction, hitting revenue goals and increasing profitability. This strategy allows teams to take the information they are allowed to access and analyze it to create data-driven stories that serve unique business needs.
Traditionally, this offensive data posture has been retailers' sweet spot. However, increased regulation and heightened privacy awareness have made it challenging to access and connect the data that support retailers' traditional levers of business growth. In building a more robust, future-facing data strategy, striking a balance between offense and defense is key.
Here are three ways to discover that balance and build or increase your competitive advantage:
A 360° view of the customer is something we talk about a lot but frankly, very few retailers have. Consider all of the first-party data that’s collected by your company and whether or not you have access to all you need to do your job efficiently. If you work in analytics, it's a fair bet that you spend a lot of time finding and organizing data. Wouldn't it be amazing if you had the right data at your fingertips so you could quickly get to the fun part of creating dashboards and deriving insights about the business?
By investing in bolstering your defensive data strategy and creating a single source of truth, you can accelerate paths to organizational efficiency, not to mention happier employees.
Once you've collected all of your first-party data, you're in a prime position to connect data in new ways, particularly information that lives outside your four walls. After all, customers don’t solely shop in your stores, browse your web properties, or follow you on social media. To gain a holistic understanding of their wants and needs, you can connect data from your media partners to more accurately calculate return on ad spend, for a start.
These connections get you closer to that true 360° view that other teams can benefit from. It's one thing to save money on your media strategy, it’s another to use this enriched view of your customer for researching and developing new products. You may even be able to uncover whitespace opportunities that enable you to dominate your category and adjacent markets.
Once you've optimized your strategy for collection and connection, data collaboration becomes possible, opening up a world of digital transformation. Collaboration brings your offensive and defensive strategies together by allowing you to safely and securely enter into data partnerships while keeping privacy front and center.
The possibilities are truly endless:
- Partner more closely with CPGs and other suppliers to provide better customer intelligence and grow share of wallet
- Share shopper insights with operational partners to help you win together in planning ahead for the holiday season
- You may even consider building a retail media practice, leveraging your first-party data to deliver relevant content to consumers and unlocking a new high-margin revenue stream
These three Cs do not happen overnight. They require executive sponsorship and consistent cross-team collaboration and alignment. It's a journey, not a destination. By building this data foundation, you will be in a better position to not only connect with consumers in a meaningful way, but also to earn lasting loyalty. That's a competitive advantage you can’t afford to pass up.