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Are two data minds better than one?

Against a backdrop of recent high-profile rebrands and equally well-known brands entering administration on a near weekly basis, large parts of the retail sector seem to be out of step with customer demands and expectations. The pace of change and growth of on-demand eCommerce is such that no matter how hard some physical stores try to keep up, many are seeing only partial successes. A new approach is needed.

Enter the brands (stocked by retailers). At the recent IGD conference, Tom Pickford, P&G’s director of e-business for Europe, India, Middle East and Africa discussed how the CPG leader is actively seeking for online retailers to share their customer data. It will be used to help P&G tailor and enhance their programmatic advertising programmes. Some store owners may see the provision of loyalty programme data as potentially handing the keys to the kingdom to another custodian, and there are concerns about whether this data will lead to other retailers achieving the sale. However, the benefits to both parties are also clear – greater customer insight, greater relevance and ultimately enhanced sales in the online environment.

The issue of second party data and its use to strengthen relationships between brand and retailer has been a matter of some debate since long before this year’s focus on privacy legislation and consent. As Amazon consolidates its position as the dominant force (some say Walled Garden) in retail, not to mention an online advertising platform to be reckoned with, the broader industry must react to its ability to swiftly respond to customer triggers within its own ecosystem.

Collaboration between likeminded businesses, under the mantle of appropriate legal basis to share, brings with it natural benefits to both. After all, it’s the customer who is king or queen, it is the customer whose demands, needs and expectations need to be understood, ideally anticipated and regularly fulfilled. Strategies that can connect data to close the experience gap with the likes of Amazon are strategies that can give the foundation and the fuel to companies in desperate need of modernisation.

Importantly, these partnerships don’t have to be in the same sector to be mutually beneficial, which would help to avoid any potential concerns about just who is being handed those kingdom keys. Just as brand partnerships can work between automotive and retail providers, data sharing partnerships could work equally well to build beneficial and relevant customer relationships between a 4x4 manufacturer, for instance, and an outdoor clothing brand.

P&G is approaching these alliances to enhance their digital ad strategies. Given their typical distance from customers and lack of direct relationships, they need the retailers to bridge that insight gap much as they need the retailers themselves to stock their products. This synergy works well in the highly transactional online world as eCommerce stores can be agile to fast changing customer needs. However, this kind of collaboration could also ease more physical stores’ issues when bridging the worlds of digital behavior and real-world store sales.

Not only does pooling information with a trusted and insightful external party allow for a much more informed and expansive customer view, it provides access to data points and incentives which can broaden a brand’s viewpoint beyond their own perspectives and interactions with that customer. While tremendous steps forward have been made to link up a single customer’s interactions between clicks and bricks, pursuing these kinds of partnerships can shed light on a customer’s movements between your clicks and the bricks of someone else entirely. Ultimately, the customer experience is refined as the marketing message relevance to their lives is incrementally better.

Of course, there will always be a role for third party insights to be layered into this equation too. Increasingly it is the quality of your ‘data stack’ that will be key determinant of performance. Going forward, it’s not just the quality of a brand’s first- and third-party data, increasingly it’s going to be about the second party data, so for retailers eyeing their current trading environment with trepidation, more tailored brand alliances may provide an actionable, test-and-learn way for them to understand and respond to their customers. While it’s easy to understand how this may benefit Commerce and grocery providers, given the strides forward made in linking online to real world shopper interactions, there is definite potential for these partnerships to shed fresh light onto physical relationships for the high street too. Perhaps it is time for some of these struggling brands to broaden their customer scope?

There is a steep climb ahead for retailers who have fallen behind today’s customer expectations of what good looks like, but getting to grips with data, is a crucial step in getting closer and more relevant to customers.

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