The ties that bind: How brands and retailers can go big by sharing data
When it comes to personalizing experiences and offering new products – customer data is gold. Most brands and retailers constantly collect and curate customer data, to understand how transactions across various touchpoints – from physical to digital – can be better personalized to boost sales, increase conversions, and bolster customer loyalty.
But mining this data gold isn’t just about the numbers. What is it about your brand that’s wowing customers? Or maybe not? What are the market dynamics telling you about purchase decisions? How can you attract new and perhaps higher-value customers? Basically, in a noisy marketplace, how can you be the vendor with star power?
Data analysis is key for both brands and retailers
Retailers and brands use data analysis to optimize product performance, boost conversion rates, and increase sales. Particularly as transactions increasingly move online, your customers are a wealth of information. Understanding their profiles, behaviors, and expectations help shape products and the overall customer experience.
Today’s brands are becoming more data-driven by adopting new tools and incrementally making changes based on their data and analysis. For example, leading beauty brand Sephora has become more data-driven over the last few years, relying heavily on actionable insights to roll out its Beauty Insider customer loyalty program.
While consumers are more informed and empowered than ever before in making purchases, there is also a flip side: consumers aren’t always very savvy about their brand decisions. CRO Manager of Ideal of Sweden even said in a recent Contentsquare event that 95% of purchasing decisions are subconscious and the next step for brands is to uncover the emotional needs of their target customers.
It’s about brands and retailers providing a memory or emotion that would stand the test of time: luxury goods targeting feelings of acceptance or athletic brands inspiring adventure and competition. It is also about staying relevant and that’s where customer data once again feeds in to help connect with consumers beyond price and offers.
But there is a key issue here that needs to be addressed.
The great disconnect – why aren’t retailers sharing insights with brands and vice versa?
Most brands’ digital selling is through retailers. For example, sales via retail outlets accounts for around 30% for fashion brands such as Adidas and Ralph Lauren; for consumables such as food and personal care, we see this rise to 100% of digital selling through retailers.
Online stores and retailers have collected data from customers from the very beginning, but the big issue is they are not sharing the pot of gold. Retailers seem to be forgetting an important aspect of data analytics is sharing experience analytics insights with partner brands to develop new revenue streams.
Similarly, brands are crying out to understand what’s happening on the retailer’s websites that would provide insights beyond sales performance. How can retailers help inform brand media and merchandising strategies?
There are several reasons why data isn’t being appropriately exchanged between the two parties:
- Finders, Keepers. It could be the competition that’s keeping data from being shared. Why share this valuable information for free? But this is a short-sighted view that is limiting retailers and brands from collaborating and unlocking new opportunities.
- Where’s the tech? Sharing insights that are this valuable needs the right platform to properly delve into the customer experience. From analyzing sales performance to understanding which products are the quickest off the virtual shelves, retailers and brands would struggle to find common ground without the right technology.
- Compliance concerns. As Forbes highlights, certain retailers may be hesitant to share customer data with suppliers due to security concerns. Especially for omnichannel supplies that have relationships with several different retailers. But with stringent regulation, control of information, and technology that is secure and encrypted, this is another obstacle that can be overcome.
Win-win with collective intelligence
It’s clear that data sharing must evolve. Although retail businesses are slowly reopening doors as pandemic restrictions ease, US e-Commerce sales will cross $1 trillion for the first time in 2022. To thrive in a digital marketplace requires insight and action; retailers need to view brands as valuable partners and in fact, an extension of their team.
Brands may have their own methods of tracking sales performance, but retail data delves deeper – identifying data sets such as category sales, individual retail branch performance, and demographics. These examples only touch the surface of the other benefits collective intelligence can bring. Check out this overview:
What’s in it for retailers
- Improve relationships with brands by providing deeper and more meaningful insights on product performance.
- Increase business of partner brands providing an overall performance boost.
- Create new revenue streams through new data products.
What’s in it for brands
- Better understand how their brand and products are searched, reached, added to cart and purchased on retail websites.
- Benchmark performance against competitors and categories.
- Improve product pages for conversion.
Improving – and acting upon – data visibility will no doubt spell new opportunities for retailers and brands to have stronger ties and jointly optimize their online sales.
The more data they share, the more that can be leveraged and created, such as co-branded marketing campaigns and new product development. Together, they can perform better to deliver outstanding customer experiences every time.
Want to learn exactly how brands and retailers can share data?
Our team would be happy to walk you through the Contentsquare platform to show you how your business could benefit from data sharing. Book your personalized demo today.