As Black Friday approaches, retail marketers are facing one of the most unique periods the industry has faced. With the challenges created by not only the COVID-19 crisis but also trends around privacy, data and identity, how retailers approach the next few months will not only determine how successful they are over the holiday period but also lay the groundwork for their success in 2021.
1️⃣ Unlock value by harnessing your disparate first-party data sources
Retailers are collecting more first-party data than ever before, partly driven by a change in the way consumers are spending. We have seen a significant increase in consumers choosing to shop exclusively online, with Ascential upgrading their 2020 online shopping growth predictions from 11% to 19% in 2020, reaching £78.9bn, and an additional shift away from traditional payment methods, with more consumers utilising in-store contactless shopping apps.
These changes mean that retailers have access to more first-party data, and therefore have an opportunity to harness greater insights into customer buying behaviour that can be used to drive more valuable marketing activity.
The first step is to unify knowledge across all of a retailer’s various first-party data assets, including in-store, app and website. The fastest and most secure way to do so is to utilise a decentralised data infrastructure, such as that provided by InfoSum, that keeps each data source distributed, while enabling seamless analysis across their unified insights.
This privacy-first approach not only allows retailers to be up and running in a few weeks rather than months, it also delivers actionable insights faster as there is no need to go through a painful and expensive data integration and laborious matching process. InfoSum utilises a ‘plug and play’ approach that makes analysis across multiple data sources available within minutes.
2️⃣ Prepare for changes in buying behaviour through a COVID-19 holiday season
With improved insights available, retailers can analyse how buying behaviour has changed since the start of the COVID-19 crisis. This insight can be used to understand how they can better serve their customers for example,
- By understanding how customers are purchasing, online, app, in store contactless, you can make logistical adjustments to your business, e.g. increase delivery, increase self-serve solutions in branches where there is high demand etc.; and
- understand how your customers are interacting with your brand, and therefore how you can provide the best customer support, e.g. virtual, phone, social media etc.
It will be vital for retailers to communicate clearly and effectively with their existing customers across multiple channels. By analysing the insights available across various first-party data sources, retailers can tailor their messaging to ensure existing customers understand how their shopping experience might differ through the holiday season, and how the retailer will ensure the best possible customer experience. For example:
- making current customers aware of non-instore shopping options that might be more appropriate based on their shopping habits or profile, for example, those categories flagged as vulnerable.
- communicating clearly and upfront any expected changes to delivery options, e.g. delivery times and availability; and
- improving communications around stock availability to avoid needless shopping trips. An example could be the recently released Xbox Series X/S and upcoming launch of the Playstation 5, tipped to be two of the holiday seasons top sellers.
3️⃣ Implement solutions to accurately measure the effectiveness of marketing campaigns
One of the trends we have seen during the COVID-19 crisis has been the tightening of advertising budgets. The IAB, for example, has reported that UK digital ad spend fell 5% YoY between Jan-June 2020. This means that retailers need to ensure that they’re spending their advertising budget most effectively.
The only way to ensure this is to measure ROI across various channels and optimise spend where retailers are seeing the greatest success. To achieve this, retailers should look to implement solutions that enable them to accurately measure effectiveness against each of their digital marketing channels.
The fastest and most privacy-safe way to do this is to utilise a decentralised marketing infrastructure. Centralised solutions have forced a reliance on marketers of their data being merged or pooled with other data sets in order to perform, analysis and attribution modelling. This approach creates security, privacy and commercial trust issues for both retailers and the media owners they want to work with.
A decentralised infrastructure removes the need for any centralising or commingling of data, instead, each party’s data remains in a private and secure cloud instance, known as a Bunker, which can be connected through anonymous mathematical models. This approach enables retailers to analyse their customer data alongside the ad-exposure data of each media owner without either party having to sacrifice control of their data. This is not only better from a security and privacy perspective, but it also allows each party to bring more data to the analysis, as there are no concerns that doing so will mean losing the commercial value wrapped up in such data sets.
The attribution insight gained can be used by the retailer to determine which channel is delivering the greatest uplift in revenue, and focus their advertising spend on that channel. Additionally, because a decentralised approach can deliver measurement analysis faster, it allows retailers to continuously optimise their ad spend, rather than waiting weeks or months for effectiveness reports.
4️⃣ Prepare for the identity challenges of 2021
If current industry trends continue, retailers should expect to see an increase in identity opacity as third-party cookies are deprecated further, ahead of Google’s 2022 deadline. Apple has thrown the industry an additional curveball by announcing privacy changes to IDFA that will require all apps to ask explicit permission from users to gather and track them across apps and websites. This change was originally expected in 2020, but delayed till “early 2021”.
Both of these changes create challenges for retailers, who may see their first-party data sources become less available for use as customers opt-out of being tracked. It is therefore vital that retailers use this time to communicate with their customers on the value they receive as shoppers from the tracking functionality. Through this early education retailers can look to influence customers so that when they’re asked to opt-in, they are more inclined to do so.
Some of the benefits to consider communicating to customers to promote this digital relationship include the ability to:
- offer a personalised shopping experience;
- highlight favourite items;
- deliver smart recommendations; and
- make personalised offers/discounts available.
5️⃣ Embrace data collaboration to unlock additional commercial opportunities
Through privacy-first data collaboration, identity, privacy, security and trust barriers can be overcome and new commercial opportunities can be unlocked.
For example, through collaboration with CPG’s, retailers can not only work more seamlessly on logistics, but they can share insights that can enable a better experience for buyers. This can include the ability for the CPG to run personalised promotions or adjust marketing activity ‘on the fly’ based on real-time buyer behaviour.
Another key collaboration that retailers should embrace is with media owners. As retailers are holding more and more first-party data, it is important to use this new customer knowledge to deliver more personalised and targeted communications.
The most effective way to do this is to match your customer data against media owners authenticated audience and build custom audiences based on key customer characteristics. Additionally, as we covered in 3️⃣, this collaboration enables analysis across both the retailer’s sales data and the media owners you can more accurately measure ROI.
For an example of data collaboration in action, read our guide to delivering high performing marketing across CTV.
The next few months, and potentially 2021 as a whole, will be a new world for retailers. And while there is the potential for the marketing industry to become even more fragmented, through data collaboration retailers can build strategic relationships that will empower them to deliver a better experience to their customers.
But only through a decentralised approach, does data collaboration work for every party. Decentralisation prioritises the privacy of customers and ensures each party retains full control of their data while enabling audience insight and targeting that delivers more powering people-based marketing activity.