In the consumer realm, it often seems like the only time data becomes a topic of widespread interest is after something bad happens. Take the Equifax breach or the fallout from Facebook’s relationship with Cambridge Analytica in 2018. These stories dominated news cycles and have had a lasting impression on how consumers view the protection and usage of their personally identifiable information (PII).
The silver lining to these events, however, is that consumers are becoming increasingly educated about how their data is collected and used by companies. This public scrutiny put pressure on companies in all industries to evaluate the transparency, security, and integrity of their data practices.
It is similar in the retail world. Consumers want personalized shopping experiences but they’re becoming highly protective of the very information brands and retailers need to bring those experiences to life. The bridge between the two is trust. Without it, brands and retailers are challenged in meeting consumers’ increasingly high expectations. They need to demonstrate, in the clearest of terms, how they seek to leverage data and how that delivers value back to consumers themselves. It’s an ongoing process that will set the stage for the role of data in 2019.
Here are a few other data-related predictions for the retail landscape in the coming year:
Brands will adhere to the highest standards of data protection to develop customer trust
Perhaps the most consequential milestone of the past year was the EU’s implementation of the General Data Protection Regulation (GDPR). Any organization that conducts business with citizens of the EU is required to meet strict transparency guidelines for the data collection process. Customers must be informed when data is collected and what it will be used for, as well as given the option to opt out if they so desire. It is among the strictest regulations surrounding data privacy in history.
Going forward, GDPR-like privacy governance will be table stakes. Brands that lead this effort will continue to be more explicit and transparent about their data gathering and use practices. “In your face” opt-ins, educational updates and permission-based campaign management should become standard practice for brands who want to attain and retain consumers’ trust. When brands are transparent about their practices, their customers will be more likely to engage with them and share their data, which in turn, allows brands to deliver more personalized experiences. It starts with transparency and trust.
Data science and traditional creativity will be tethered unlike ever before
If you think about how buzzwords have been used to describe marketing strategy, they have one element of consistency: they all focus on using data to understand the path to purchase. Think of people-based marketing, data-driven marketing, or 1:1 marketing at scale as examples.
Incorporating emotional signals from before, during and after the point of purchase with demographic and shopping behavior data to better understand the customer experience is a hot topic in 2019. What emotion did the customer feel after interacting with a brand via live support or a chatbot? How does that compare to their experience with in-store personnel? How did they feel about the product after purchasing it? Did it function as advertised? We will see sentiment and tone analysis as an additive to quantitative data about gender, location, age, etc., so that we get a more balanced understanding of the customer experience.
Marketers and advertisers will place a greater emphasis on ensuring healthy data sources
A significant realization among marketers and advertisers in the last couple of years was that improving customer retention, growing market share and garnering more share of wallet starts with the quality and freshness of a brand or advertiser’s in-house data.
In years working with data, it always surprises me that the gold mine of customer information in a marketer’s house is not regularly cleaned, updated and enhanced with outside data to provide a more complete picture of online and offline behavior. Marketing and data waste will continue unless brands take the necessary first step of aggregating, cleaning, organizing and optimizing in-house customer databases. Otherwise, building genuine personas that reflect the complex nuances of viewing and shopping behavior cannot be achieved.
Data is the bedrock of the brand promise
Brands and retailers are being called upon to deliver highly personalized, engaging experiences on an individual level. In today’s landscape, where customers judge experiences at the very highest benchmark, data is essential to delivering on the promise of exceptional, curated touchpoints. By doubling down on protection, transparency and health of customer data, brands and retailers can more effectively build long-term relationships and create advocates for life.
Ann Kennedy is General Manager Global Data at Bazaarvoice