If retailers could improve omnichannel conversations with customers, why wouldn’t they? Because change is difficult, and trying to keep pace in an increasingly complex retail world can be challenging at best.
Data monetization is a perfect example. Though an increasing number of change advocates across the retail industry recognize the advantages of monetizing data, for everything from adapting business models for e-Commerce to measuring brand sentiment, not all retailers have successfully kept pace with the changing landscape, and there is more to be learned by all. Those who do “get it” are helping their company leverage this revenue stream in new ways, to compete and differentiate themselves in the competitive retail ecosystem, and are doing so while keeping consumer trust and transparency top of mind. Here’s how.
The Ever-Expanding Universe Of Data
Every day, the volume and variety of data available in the retail ecosystem increases, accelerating the rate of digital transformation in e-Commerce and creating a thriving data economy. Many organizations already invest heavily in data collection, whether via their store’s mobile app, customer loyalty programs or email newsletters. However, these same businesses may not fully understand the value of leveraging the insights that can be gleaned from these data sources to gain a competitive advantage.
For example, take the concept of identity resolution — where data can identify the same shopper across all of their online and offline touch points so the brand can learn what the shopper likes to buy — and how — over the entirety of the customer’s relationship with the brand. Another example gaining popularity is location-based targeting, where brand marketers use historical shopping data, identity resolution and a shopper’s geographical location to inform more relevant and effective marketing messages that result in higher and more frequent sales.
The good news for brands looking to make the most of their data intake is that U.S. consumers are becoming more open to sharing their data in exchange for better offers and services from their favorite brands — 58% of them in fact. A new study, “Data Privacy: What the Consumer Really Thinks” found nearly half of consumers are more open to sharing their personal information with brands than they were previously, but only for brands they trust. 54% of consumers named trust in an organization as the most important factor influencing their willingness to share personal data. That means brands and retailers must be transparent about the way they collect their customers’ data and make it clear how they are using consumers’ information for improved benefits and offers.
It’s without doubt that data has become an invaluable asset for a growing number of retailers, but it’s how they ensure it’s managed in an ethical manner and applied against the objectives of an organization — at a tactical level — that differentiate how the organization performs at a strategic level. Monetizing data creates a new revenue stream for retailers and other brands that aren’t specifically in the data business. This new revenue stream can offset overall expenses or be invested in additional data capabilities that improve insights to further increase top line sales.
The Amazon Effect
In retail in particular, Amazon, Alibaba and other powerhouses are redefining traditional business models and raising the bar for customer experience. They are forcing traditional companies to accelerate the decision-making process, and data is the key component in this undertaking. Companies that fail to invest in data at scale will lag in their ability to make accurate and timely decisions, negatively impacting their ability to compete.
The digital world is all about disrupting traditional business models. Brands that have led the retail industry for decades are now faced with new competitors that don’t have the same cost structure and can move more expeditiously to serve customers. These traditional companies are realizing that the ethical and appropriate use of customer data can unlock untapped potential in their organization. Many longstanding retail industry leaders have captured data for years. If they recognize and realize the advantage this data affords, these retailers will be able to compete at scale with digital disrupters and meet customers’ increasing expectations.
Walmart is a great example, having invested heavily into e-Commerce with the acquisition of Jet.com and its Store No. 8, which is dedicated to pushing the envelope in retail technology. Home Depot is another driving force in the industry, taking a smart approach to omnichannel by growing its technology team to remain competitive with Amazon while also investing substantially into its brick-and-mortar locations.
At its core, the monetization of data equates to the opportunity to activate, enhance and create new value from a company’s existing assets in a privacy-compliant way. We also know consumers are developing a better understanding of the value of data exchange, and they will choose to share these insights with brands they trust, equaling a win-win for all involved.
Monetization serves as a genesis for leveraging data as a competitive asset. It can create a new revenue stream to support expanded investment in data capture, processing and insights, while also reducing sales, general and administrative expense across the organization, resulting in improved profitability. The cherry on top? Data monetization can be enabled through partners at minimal to no new expense.
Once retailers and brands evolve their understanding of the ways data can be used for good, they can begin to move toward becoming a data-driven enterprise.
Trey Stephens is the director of audience monetization at Acxiom, where he specializes in connecting offline with online data and audiences, marketing technology, and creating and growing strategic partnerships across industry verticals. Previously, he held several roles at Walmart, including Senior Manager, Strategic Partnerships for Global Customer Insights and Analytics, in addition to Senior Finance Manager for the company’s Information Systems Division.