5 Ways to Drive Retail Business Growth with First-Party Data

In an era marked by escalating worries regarding data privacy, the deprecation of third-party cookie tracking and the relentless demand to achieve greater results with fewer resources, the digital marketing terrain is undergoing swift and significant transformations. To navigate this shift effectively, European brands must focus on building out and owning their first-party data capabilities. 

This, of course, isn’t news to marketers. But for many, the struggle to make the promise of first-party data a reality is hindering their progress. Research from GfK demonstrates that a third (33%) of senior marketers struggle to  connect data across disparate internal sources.

Regardless of the importance of collecting first-party data, the asset doesn’t become valuable until they are able to turn it into something actionable. Only then can marketers deliver tangible benefits for their customers and concrete improvements to their bottom line. 

In the first installment of this three-part series, I break down the common challenges brands face in realising the promise of their first-party data. Let’s dive in. 

Data dilemmas: Retailer’s first-party challenges

First-party data is information brands collect directly from consumers with their consent. This data is owned by the brands for analytics and marketing purposes. The collection of first-party data has been an imperative for companies looking to deliver personalised experiences to consumers who want their data privacy to be respected. That personalisation is the value your customers get in return for their data.

Analysts have also maintained that first-party data unlocks incremental revenue for brands while increasing cost efficiencies and return on ad spend. To drive profitable growth and make smarter decisions, retail leaders are embracing first-party data as the foundation for achieving these goals.

But many retailers continue to grapple to unlock the promise of first-party data, allowing them to create more targeted, effective and meaningful campaigns that drive customer engagement, loyalty and ultimately, business growth. The disconnect can come from a range of places. Here are the areas where first-party data challenges tend to arise:

• Dirty data: Start with the data itself. From data entry errors and inconsistent formatting to duplications, out-of-date or stale data, etc, the range of issues plaguing first-party data are vast. If the data isn’t correct, if the data can’t be connected back to an identified individual or household, or if the data is housed across disjointed silos, a marketer’s efforts to activate it will be stymied.
  
• Lack of strategy and infrastructure: Multiple parts of the organisation will have a need to manage and access the customer data it collects. This requires strict governance around who can access it and for what purpose. Without a clear and well-communicated first-party data strategy in place, along with an infrastructure to enforce governance, organisations will face roadblocks.
  
• Lack of access: Data democratisation is a current rallying cry and for good reason: Real-time, data-informed decisions can’t be made if you have to ask the data science team to make a query for you and wait weeks for a response. Data democratisation requires tools and methodologies that streamline data complexity, so marketers and their teams can use it in their day-to-day jobs.

Beyond these three key areas, there’s even more to the challenge. The whole point of using first-party data is to gain a comprehensive understanding of your customers to meet their needs more effectively. To achieve this, retailers need access to data that has been unified, so they can glean critical insights. Additionally, they must learn how to deploy this data strategically on the right use cases, and measure the value it brings to their retail marketing campaigns.

Achieve the promise of first-party data now

There’s a lot of hype around first-party data. But don’t let that distract you from how useful it can actually be. Activating your first-party data can deliver real benefits. Some common use cases include: 

1. Customer intelligence: First-party data is your most trustworthy data resource, because it comes straight from the customer. By harnessing this data into a central and robust intelligence platform, you can gain a clear view of your customers’ journey, which helps you understand your customers and what motivates them. This allows you to craft campaigns and experiences that matter to them.

1. Customer acquisition: First-party data strengthens customer acquisition because it gives you insights into who your most valuable customers are. You can then use those insights to develop look-alike audiences based on those preferences and behaviours.
   
2. Improved personalisation: Once you have a deep understanding of your customer segments, you can craft highly nuanced messages that resonate with each. For instance, a popular sports team we work with has been able to create one unique profile that tells the correct and true story around what each fan is doing with the team. This allows it to speak to each fan in different ways.

1. Reduced costs, risk and time to value: First-party data offers tangible benefits to your budget, including cost savings on media, lower risks in terms of data privacy and faster time to value. Because you own it and have collected the proper consent, you can deploy the data quickly and enjoy greater efficiency. One popular hotel chain, which, by consolidating disparate data into a single view of the customer, was able to decrease its media costs by 35 per cent with better targeted communications.

1. Maximise retention: By analysing customer behaviour, you can make reliable predictions of future customer actions, such as which types of customers are likely to churn without some kind of marketing intervention. This insight can also fuel effective win-back campaigns.

Now that we’ve examined the typical obstacles brands encounter with first-party data and emphasised how it can deliver tangible outcomes quickly, it’s time to deep dive into your questions. In part two of this series, we’ll explore actionable strategies and best practices to overcome hurdles and unlock the full promise of first-party data. Stay tuned for insights that will revolutionise your approach to customer engagement and drive measurable business growth.

Find out more insights on how to make your first-party data work for you in our new white paper here.