The world of retail has undergone a seismic shift in recent years, and the impact is being felt across the industry. For decades, the biggest advertising budget guaranteed the greatest reach, but those days are long gone. The rise of social media has given small indie brands a platform to compete and collaborate with influencers, leaving the big players struggling to keep up.
To thrive in today’s fast-paced and dynamic retail environment, UK beauty retailers and CPGs must embrace the power of data and use it to bridge the gap between their customers’ needs and their business objectives. By collecting and analysing customer data, brands can create personalised experiences that engage consumers across all channels from direct-to-consumer (D2C) to indirect channels.
And with the ability to measure the impact of their efforts, they can continuously optimise their strategies to drive sales and build long-lasting customer relationships. The data-driven economy may seem daunting, but with the right tools and mindset, CPGs and other retailers can unlock unprecedented growth and success.
Making privacy a priority
Before retailers and CPGs can dive into best practices, they must have a crystal clear understanding of privacy internally. In today’s digital world, data is a double-edged sword. It serves as both the lifeblood of the retail industry whilst also representing one of the most tightly regulated and potentially risky aspects of a brand’s operations.
🏆
The 2024 Creative Retail Awards are open for entries.
The Creative Retail Awards are much more than a mere accolade; they represent the pinnacle of achievement in the retail industry. Garnering a nomination or winning one of these awards is a testament to innovation, excellence, and leadership.
www.creativeretailawards.com
That’s where the UK’s Data Protection Act and General Data Protection Regulation (GDPR) come in, designed to safeguard consumer privacy and ensure that consent is always given. Compliance with these laws is not only an ethical responsibility but a financial one too, with penalties of up to €20 million or 4% of annual global turnover for non-compliance, whichever is higher. Yet, according to research, more than half (52%) of UK businesses are still not fully GDPR compliant.
Considering that 88% of online shoppers in the UK say they would stop using brands and organisations that don’t value consumer data privacy, this is especially concerning. Brands that fail to prioritise data privacy risk reputational damage, legal and financial consequences and ultimately, losing the trust of their customers.
Amidst the evolving landscape of privacy laws impacting the retail sector, retailers can also consider innovative strategies to protect their interests. Exploring the concept of a secret trust as part of estate planning, as discussed by willstrustslpa.co.uk, could offer insights applicable to navigating changing privacy dynamics in business.
Getting your ‘data ducks in a row’ to maximise your customer reach
Succeeding in today’s dynamic landscape requires emphasising unique reach over third-party data and walled gardens. This means shifting focus towards a brand’s owned (first party) and second-party data ecosystem.
Unique reach is about reaching genuine, high-fit customers and growing that number over time. It means obsessing over name collection, focusing on big opportunity segments alongside 1:1 personalisation and improving the ability to maintain that reach across paid and owned channels.
This, in turn, allows retailers and CPGs to maximise ROI and improve measurability of campaigns to prove the value of their first-party data efforts. To make a real impact on consumer behavior and capture market share, CPG companies need scalability. Without it, even the best customer data and personalisation strategies fall short in demonstrating meaningful ROI.
There are five main benefits of unique, first-party data reach, including:
- Enhanced channel control: Ability to own and control channel strategy, driving customer traffic to D2C or indirect retail channels more effectively than retailers alone.
- Increased collaboration: Motivates retailers to participate in second-party data clean room solutions, fostering increased collaboration and shared success.
- Cost-effective customer engagement: Shifts focus to lower-cost channels for re-engaging customers, improving customer acquisition costs and driving growth.
- Valuable M&A insights: Provides valuable insights into M&A opportunities and potential for new customer growth.
- Informed decision-making: Enables smarter, more informed decisions for long-term success.
The brands that are getting it right employ a unified data strategy, which allows for more efficient and accurate data management. This includes suppressing customers who have opted out of communications and then being able to maintain the integrity of that information across all channels. By understanding the types of data, where it’s stored and how it’s collected and used, marketers can make informed decisions and tailor their strategies to meet the unique needs of their customers.
Investing in customer data platforms (CDPs) enables companies to track, manage and integrate customer data across all touchpoints, resulting in a more cohesive and personalised experience for customers. This not only improves the customer experience but also saves time and resources whilst keeping companies compliant with privacy laws
Lessons from the beauty industry
Before I joined Amperity in 2017, I worked with global beauty conglomerates Estee Lauder and L’Oréal, helping them make better use of data to unlock incredible experiences and emerge as industry leaders. During my time there, I learnt a lot through trial and error.
Here are three key takeaways to thrive as a retailer whilst balancing privacy and personalisation:
- Don’t do anything that would put consumer data at risk: When you spend over a century building your brands, there is no action you could take to earn a little extra money that would be worth damaging any of them.
- Destroy trust, destroy the relationship with the customer: Privacy is everything. There was a time when there wasn’t a surefire way to give the marketing team the data they needed in a way that was privacy-compliant. But now there is. Amperity is a proven, scalable solution to brands’ identity resolution problems. The brands that work with us know that we’re going to keep inventing software solutions and interoperability to the dynamic ecosystem. As it changes, Amperity is evolving right along with it.
- Figure out collaboration: With the demise of third-party cookies, second-party data collaboration in clean rooms is crucial. Scaling D2C, first-party data requires privacy-safe collaboration with retailers. Finding secure tools that meet legal and privacy requirements can be challenging. For most businesses and retail media networks exploring collaboration, extensive experimentation is necessary. Prioritise consumer transparency and involve them in the collaboration process, ensuring they understand and acknowledge it. Communicate the purpose of collaboration as enhancing their experience.
Bottom line: The old ways are changing
Third-party cookies are being phased out by major browsers and privacy regulations are in full force. On top of that, customers are demanding greater privacy and control of their data.
But one thing hasn’t changed: Customers still demand personalisation. Retailers and CPGs must find new ways to balance personalisation with privacy. This means shifting their focus towards privacy-centric strategies that respect customers’ data and preferences.
A deeper understanding of customers means you can provide more personalised experiences across multiple channels. Layer this with a deep commitment to privacy, and UK retailers and CPGs can not only navigate the ever-changing retail landscape, but also outshine their competition and win the hearts of their customers.
