With stricter government regulations now coming into effect and expensive costs to acquire unreliable and inaccurate third-party data, brands are now focusing all their efforts on collecting and analyzing first party data. First party data is collected directly from the customer and hence not only brings a high level of data accuracy, but also higher data governance and control. It is imperative for brands to prove value to customers when collecting such personal information from the customer. Brands can then use this information to give rewards and incentives through the loyalty program as well as deliver highly individualized customer experiences when shopping across all touchpoints. A Forrester research states that 73% of U.S. consumers like to buy from brands that use information about them to deliver more efficient shopping experiences. This is more vital in case of retail brands that have an amazing opportunity to interact with their customers that walk into stores.
Importance of First Party Data
First party data collected from customers can be analyzed and leveraged to deliver a better shopping experience. Here are some benefits of collecting first party data
Loyalty Programs provide mutual value exchange
Data-led strategies require brands to analyze the data collected prior to making marketing decisions. This creates a great blueprint for brands to steer their marketing efforts and spend their budget wisely. Loyalty programs are the most effective form of collecting first party data. Brands that implement loyalty programs successfully are able to reward perks and benefits to customers in exchange for providing their personal information. This personal information collected can also be harnessed by brands to build a strong customer profile in their CRM or email marketing software to create a powerful targeted marketing campaign.
Brands like Marriot and Sephora have been heavily investing in their reward programs to provide maximum value to their customers and maintain a high level of customer retention.
Deliver better shopping experience
According to a Forrester research, 61% of customers are unlikely to return to a website if they do not have a satisfactory customer experience. Shoppers today are looking for highly individualized shopping experience in order to stay loyal to a brand. This puts a tremendous onus on brands to deliver on-point omnichannel shopping experiences. Brands having a loyalty program run special reward campaigns and promotions for collecting data from customers in the form of a poll or quiz. This engages the existing customer base and also supplements the growth of the loyalty program in general.
Customers are also highly motivated to shop with brands that present relevant shopping experiences based on information collected and past shopping history. Leveraging first party data, brands are able to create predictive models to ascertain future customer behavior and engagement while improving marketing campaigns with targeted offers.
Higher level of data accuracy
Consider first party data as the data collected at source which makes it highly reliable and accurate. Creating lookalike audiences based on first party data brings a high level of data accuracy and relevance as opposed to third party data. According to a study by Quantcast and Iligo, first-party data was found to be most reliable by 65 percent of the respondents.
With brands now making loyalty programs their go-to strategy, they are able to harness this highly accurate customer data real-time and make extremely intelligent decisions using AI modelling to present extremely relevant and rich customer experience across all channels.
Impact on Retail
Retail customers have a golden opportunity to collect first party data from all customer interactions in exchange for benefits in the form of loyalty points or entries into sweepstakes. With the sudden impact of the 2020 pandemic and stricter government laws being implemented, brick and mortar stores were required to pivot to ecommerce strategies that would continue to deliver valuable shopping experiences to customers. Brands need to use the first party data collected from all sources to build a single view of the customer profile. It is extremely vital to make this data seamlessly available across all verticals of the business to leverage. Brands are now beginning to invest in customer data platforms (CDP) like Treasure Data or Optimove to build a single customer view and make it available across all business verticals like marketing, analytics, ecommerce, etc.
VF Corporation, that owns brands like Vans, Timberland, The North Face, and SmartWool invested heavily in integrating with a customer data platform to build a unified customer profile database that helps their all brands and teams to leverage this customer information to provide improved customer marketing, targeted offers and campaigns and deliver seamless customer experience all all brands in all their channels.
Sephora runs its omnichannel beauty insider loyalty program successfully by continually delivering rich individualized shopping experiences. On their ecommerce website, they ask customers to take a quiz or fill out personal information in order for them to recommend the best fit products. Similarly, in their retail stores, they introduced a 5-minute survey where customers were asked to take a picture and upload their photo within the kiosk and Sephora would recommend the best foundation fit for their skin tone. This not only provides value to the customers but also helps with customer engagement within the store.
Walgreens aimed to achieve a unified view of the customer by implementing a high personalization strategy. It replaced rules-based models with machine learning (ML) models for predictive analytics to create personalized experiences. According to a Forrester research, in Q3 2020, Walgreens reported that the mass personalization program boosted its retail sales by 140 basis points in the quarter, a significant increase from the 95-basis-point impact in the prior quarter
Annex Cloud Loyalty Experience Manager provides advanced customer retention and loyalty solutions, designed to engage and reward your most valuable and profitable customers. Our ability to segment customers and personalize customer engagement has led to significant increases in average order values (AOV), frequency of purchase (FOP), and most importantly, the ability to retain valuable customers who are driving the majority of your revenue. To further illustrate this point, Sugarfina, a premium boutique candy company, saw their revenue increase by 15% and repeat transaction frequency increase by 57%. Call us today.