Here are actionable steps retailers can take to encourage consumers to share data and then make good use of that data over the long term.
Marketers have entered a new era focused on data privacy. Google plans to retire the third-party cookie, and Apple has already downgraded its mobile identifier as part of ios 14.5. Plus, governments from California to China are cracking down on data collection without consumer consent.
These changes are forcing brands to figure out how to collect first- and zero-party customer data. But shifting from relying on third-party data to gathering enough information directly from customers to power a marketing strategy at scale is easier said than done.
There are actionable steps brands and retailers can take to encourage consumers to share data with them and then make good use of that data over the long term. These steps include making customer convenience the focus of data collection, using data to foster loyalty beyond an initial sale, and leveraging identity to transform short-term tactics into long-term gains.
If brands and retailers build customer data strategies on these principles, they can transform the customer data conundrum into an organic process wherein data collection is simply part of a positive customer experience.
Providing convenience in exchange for data
Brands and retailers used to collect data without consumer consent or rely on third-party data brokers to gather information. Now, as the conversation around consumer privacy changes, retailers and brands have to ask consumers directly for their information.
The good news: research shows that many consumers are still willing to share their information — provided they know they’re receiving something in exchange for it. The onus is on brands and retailers to make the case for data collection to shoppers by clearly explaining where and how their information can be used to enhance the customer experience.
Approaching data collection as a conversation centered on consumer preferences incentivizes individuals to provide the high-quality, relevant information that retailers can use to better understand and meet customers’ needs. How? A retailer like Walmart might encourage customers to share a preferred communication method with a prompt at checkout, offering them notifications about upcoming price cuts on their frequently purchased products or updates on item restocking. Prioritizing convenience as well as consent in data collection fosters brand equity by showing customers how their information is being used to add value to their lives.
An omnichannel strategy offers further opportunities to use customers’ data to make their lives easier. In a post-purchase confirmation email, Walmart might ask shoppers about the specific types of products they’re interested in receiving promotions and offers for — boosting the relevance of future physical-store retargeting campaigns and the likelihood that customers will make the transition from shopping online only to hitting stores for the types of products shoppers prefer to check out in person.
Fostering deeper bonds, not just sales
Offering convenience in the form of personalized recommendations or reducing friction at checkout is the first step toward providing value in exchange for data. But using customer information to craft helpful content takes that value-add to the next level.
For instance, a company like AutoZone that sells automotive parts and accessories might craft a series of informative videos to walk drivers through the basics of vehicle maintenance or provide guidance for common DIY-level repairs. Or, the retailer could push targeted pop-ups to the AutoZone site, prompting visitors to opt-in to reminders and advice based on their purchase history — say, when to replace tires, windshield wipers, or change their car’s oil.
Informative, customer-centric content shows shoppers that you have their needs in mind beyond the point of sale. Using customer data to deliver targeted resources and helpful expertise brings consumers value and nurtures a deeper connection than a discount alone. This earns brands and retailers points for credibility while still providing them insights into purchase patterns that can drive future retargeting and incremental revenue over the long term.
Combining short- and long-term value through identity marketing
Generic discounts may turn heads in the moment, but they offer little in terms of cultivating individual relationships or lasting brand loyalty. By contrast, using data to connect with customers as individuals, not just consumers, is an effective way to foster a relationship with staying power beyond any single sale.
For instance, a brand might use zero-party data to craft promotions exclusively for consumers with certain professional identities: say, military veterans, educators, or first responders. The athletic shoe brand ASICS, for example, offers discounts to medical professionals as a sign of appreciation for the work they do protecting the community. Individuals who confirm their professional status using a secure identity verification tool receive 40% off purchases.
This doesn’t just give shoppers an incentive to buy. Acknowledging customers for who they are sets you apart from your competitors and establishes a connection that could drive a long-term competitive edge. This is what it means to infuse the stuff of long-term connections into short-term interactions.
Consumers and brands are both savvy to the fact that data is valuable. But that doesn’t mean that accessing this value has to be an adversarial process. By delivering value in exchange for customer information, using data to build high-quality relationships, and investing in the long term, retailers and brands can overcome signal loss and stay competitive in the transition to the era of privacy.
Sai Koppala is the CMO at SheerID. Previously, he led a variety of marketing and product teams at global software companies like Google and SAP and start-ups like Proximity (acquired by Apple) and Apigee (acquired by Google).