How customer data strategies are driving sales, bespoke CX & loyalty in retail

With the growing demand and necessity for digital commerce channels and capabilities, retailers have been quickly transforming their business goals, operations and strategies to go beyond the convenience and utility of eCommerce to offer customer experiences that deliver personalized support, entertainment, and a great sense of community.

In order to meet the unique challenges of omnichannel selling and ever changing needs in a rapidly shifting consumer landscape, organizations are also actively exploring the business processes to best provide improved customer service assistance, and foster loyal customers in third-party environments beyond the retailer’s digital store.

To do so, brands and retailers are looking to social media, streaming platforms, and mobile app leaders for innovative commerce practices. As a result, the researchers behind PSFK’s recently published Customer Data Integration report found that brands are cultivating an engaged consumer base and designing customer data integration strategies based on actual customer feedback, from disparate sources and single source real-time data, plus comprehensive customer data-driven insights. 

Retailers Still Fumble With Consumer Insights

Personalized insights drive consumer trust, but the ability to track customer journeys is still a challenge for many retailers. According to a survey by Adobe, 72% of consumers say their trust for a brand increases when content is relevant and delivered at the right time and place. The challenge though is that 33% of organizations are still not able to track customer journeys (Sitel Group, 2022). 

It’s no surprise then that when asked to identify the most important opportunities to improve the omnichannel shopping experience, two emerged at the top of the list for retailers in a survey for a report by RetailWire : “developing a deeper understanding of customers and segmentation,” chosen by 53% and “improving data integration between online and offline channels,” chosen by 49%. (RetailWire report, 2022). 

Trust & Personalization

Privacy and transparency around data and its uses will guide customer participation, making trust a priority while delivering personalization. A major challenge is that consumes are worried. A 2021 survey revealed that 7 in 10 consumers believe their data is less protected than in the past (Jebbit, 2021) and another study by Axway found that three quarters of consumers feel mobile apps should specify how they are tracking their activity and preferences across different apps and websites.

Brad Fager, Senior Director Analyst at business consultancy Gartner says, “By 2025, 75% of the world’s population will have its personal information covered by modern privacy regulations. This reiterates the need for brands to leverage customer data with a proper understanding of customer preferences, terms of service and relevant regulation.”

Retailers as Data Centers 

Following the ecommerce surge that started during the pandemic, many retailers have become data companies in their own right. Nick Green, the Co-founder and CEO of  e-commerce membership-based retailer Thrive Market realized this and recently admitted, “The mission basically led us to create a new business model where it’s like, hey, we’re a retailer, now we’re a CPG brand, and now we’re a data company.”

Other experts agree but suggest a step by step approach to building data capbilities. Or Lenchner, the CEO at web data collection company Bright Data says that any company of any size should start by defining the data that will make a difference to their business efforts. “The data is there for the taking; all you need to do is ask the right questions for your business and try to reach that data manually on a small scale. Then, you can go bigger and automate additional processes,” Or says. Amy Sharif, head of data science operations at decision intelligence startup Peak adds, “Data is extremely useful, but can also be overwhelming if you try to answer too many questions all at once. It’s important to weigh up the ease of collecting and analyzing certain data versus the impact any insights would have. This will help you to prioritize where to start.”

A Shifting Role Requires New Skills

There still remain a number of data-related goals and challenges for retailers as they shift into this new role as data center. For 2022, the top investment priority for retailers is “expanding digital capabilities to improve the customer experience,” which was chosen by 63% of respondents to a survey run by Retail Wire. Data-related priorities also included “improving forecasting and inventory management,” which was chosen by 39%, and “improving real-time availability of data to support operations,” chosen by 38%.

3 Essential Steps To Customer Data Integration

In a new report on the topic of data enriced CX, PSFK researchers explored how retailers and brands are gathering customer insights and gaining deeper understanding of customer activities through customer data integration strategies and value-driven incentives. Supported by studying best-in-class examples of innovation from across the marketplace, they learned 3 key steps when it comes to how retailers and brands were then activating around this business intelligence to improve customer experience and implement data-backed initiatives. 

1. Establish new touchpoints to collect customer data. For example. IBM is bringing an innovative suite of next-gen Automated Order Taking (AOT) technology to the McDonald’s drive-thru experience by leveraging customer data to enhance and optimize the shopper journey.
2. Improve customer experiences and make informed decisions. For example, Shein’s AI engine can quickly pick up a change in demand or interest in new trends, and its supply chain can react in real-time, giving consumers more value and the brand much cheaper operating costs.
3. Create a fair exchange customer data model. For example, a new and immersive and interactive digital product trial and recommendation program from Lowe’s helps customers use the metaverse to plan out their real-world home improvement projects.

These are some of the findings from PSFK's Customer Data Integration report. Available to download today, this customer data strategy guide for the integration of new channels, models & experiences to curate Insights, enhance CX & optimize retail operations.