First-party data and customer relationships put retailers in the drivers seat when it comes to personalisation, according to Teavaros Nico Pizzolato

In retail, not all roads lead to Rome; that is to say, not all customer journeys lead to a purchase.

In eCommerce, flickering interest, browsing distraction and abandoned shopping carts are all in the way of a successful transaction. Furthermore, prospective customers often switch channel – desktop, mobile, in-store – while hunting for a deal.  Personalisation has emerged as a byword for an effective strategy to engage, upsell, cross-sell, and retain customer loyalty through the activation of data. However, the quest to resolve customer identities has often led retailers into exposing their data assets to prying eyes, being locked in martech vendors ecosystems, or surrendering themselves to a one-sided relationship with Facebook or Google. These tech giants rarely share the insights that they have gleaned from ingesting retailers’ data and use the interaction of retailers’ customers to create their own segments that then could be exposed to the campaigns of competitors.

Of course, retailers need not surrender their data assets to benefit from them. Personalisation works best when it moves away from profile segmentation based on demographics to identify the customer’s unique preferences. Think of a retailer that offers users a ‘recently purchased’ section when customers log back to their account. If users regularly buy those items they can quickly load them into the cart, while the retailer can cross-sell items usually associated with those purchases, increasing the value of the order. This kind of personalisation is perhaps best exemplified by Amazon’s ‘Recommendations for you’ section, while the site also creates bespoke bundles based on user browsing behaviour. In both these cases, personalisation works because the retailer recognises the customer as an individual, not as an audience segment. And while the order may or may not swell in size, the customer relationship and the brand value both benefit from suggestions that are relevant, timely and updated.

As these examples suggest, the retailers’ best asset is their first-party data and the foremost challenge is to activate it, perhaps matching it with third-party sources, while retaining full control over it. One of the challenges comes from the sheer wealth of data that retailers can capture, in particular those who operate in both an online and offline world and want to bridge them. The whole picture is made of many fragments: registered customers’ data, social media interaction data, loyalty programmes online and offline, transaction records, and so on. Retailers need to build an architecture that joins up this data, and the different formats with which it is recorded. They also need to analyse which channel influences most the outcome of a given campaign and the decision of what should be put in front of a customer. In other words, there are many, seemingly endless, datasets, but not all are equal in importance for the marketer. The data coming from multiple touch points must be brought together and its relevance discerned.

The data may be important, but there is another facet that gives retailers a significant advantage over the unknown players of the digital advertising ecosystem – the customer relationship. The familiarity of a consumer brand or well-known retailer allows for the engagement that can activate data assets while ensuring the activities that the data is used for are welcomed.

While customers do tend to prefer personalised offers, these are times of heightened sensitivities with regards to privacy. GDPR-like legislation has raised the bar of what kind of consent users need to give to what kind of data and this definitely sets some boundaries of what retailers can do even with customers they know well. Legislation aside, users are increasingly disenchanted with ads that follows you around the internet, aggressive upselling, or use of their personal data to which they are not conscious of having consented to. In other words, a data-driven personalisation is essential, but it is easy to get it wrong.

In this ever-complex digital ecosystem, we at Teavaro have assisted FMCG retailers in unifying the various touchpoints from the digital and real world into a single customer view within the retailer’s own architecture. Our model provides far more benefits than abdicating data responsibility to third-party services and it is customisable to retailers in any industry. Of course, these channels and relationships within the wider digital ecosystem are still available, but under the increased control of a platform that can affect changes and adaptations in real-time. Increasingly the customer themselves has more impact on the day-to-day data usage too, and thus bringing that control to the owner of the customer relationship makes more sense.

Retailers can overcome the intertwined challenges of control and confidentiality by creating their own architecture for personalisation – or hiring the right people to do that for them. It might seem counterintuitive, but rather than jumping on the data bandwagon by plugging into the ad tech juggernauts, retailers could build their own customers profiles with a customised ecosystem for digital marketing that fits their own marketing goals while protecting their data assets. By tying together different identifiers, offline and online, first-party data can go a long way both on their retailers’ own e-commerce site and in a controlled and transparent collaboration with publishers. When used to inform the individual experience, rather than to build an audience segment, data can become a major competitive differentiator. While doing personalisation right requires mastery of the technical challenges – data silos, data quality, the multi-channel touch points – the real priority is a change of organisational mindset in regard to what strategy to adopt…