The retail industry is in a state of flux. The dominance of digital titans like Amazon is forcing a pivotal shift, and this is making it harder than ever for everyone else to compete. Nike, a longstanding and outspoken opponent to Amazon’s retail dominance, proved that even global brands can’t afford to stand still in the face of this change when it signed a Summer partnership with the ecommerce giant early this year.
But in a seemingly imbalanced world, there is a way to level the playing field. Data. Our study with Forbes Insights confirmed that companies understand the critical importance of data, are working hard to leverage the information they have, and see opportunity in working together to gain a competitive edge.
The rise of these data-fuelled requirements is leading to a bifurcation in the industry. Not surprisingly, commerce companies are concerned about the rise of physical-digital giants and their maintenance of walled gardens—controlled data environments owned by a single entity, such as Amazon.com or Facebook, and not in collaboration with others. Retailers and brands are unsettled by this industry-wide disruption and how it will affect their ability to compete in the marketplace. On one side, there are companies who own and control large amounts of customer data and are able to leverage it to fuel their growth and dominate the marketplace. On the other side, there are those still struggling, unable to significantly grow or maintain market share without access to pools of data and the ability to fully leverage them.
However, data ecosystems, and strategic collaboration with third parties, has the potential to level the playing field. Our report, 'The Commerce Data Opportunity: How Collaboration Levels the Retail Playing Field' revealed that brands and retailers recognise data as the key to differentiating their offers in an increasingly competitive world. With data reigning supreme, companies recognise that pooling non-personally identifiable customer data leads to more satisfied shoppers and improved sales. This type of collaboration addresses some of the very fears they have about how the physical-digital titans will impact their business.
In fact, almost four out of five global marketers include customer data as a part of their business strategy—and are successfully collecting and using data across channels and phases of the buyer journey.
But with the shadows of some of the world’s biggest companies looming large over retailers, simply having data is no longer enough.
In the information-age in which we live and shop, pooled data assets are a way to gain a competitive edge by co-creating scale. Forward-thinking brands and retailers understand that their data alone won’t be enough to compete with the industry’s behemoths. As such, brands and retailers are beginning to embrace the idea of collaboration and the use of data ecosystems as a way to deliver customer value and remain competitive. With data reigning supreme, companies strongly believe that pooling non-personally identifiable customer data leads to more satisfied shoppers and improved sales.
Many, around half, are already doing this - and they’re reaping rewards citing increased revenue and improved customer satisfaction as a result. So much so that 71 percent of global brands and retailers are now willing to contribute data to a pool hoping to replicate these results.
One store, for example, has a finite number of touchpoints which will only ever deliver a limited view of a customer. However, combine hundreds or thousands of shops, both online and offline, and all of a sudden the complexity of the modern shopper starts to take shape. Intelligent application of machine-learning, suddenly, retailers will be able to base their campaigns on more browsing and purchasing events than would ever have been possible in isolation. With today’s shopper browsing and buying on more devices than ever before, this approach also helps retailers understand the full extent of their customer’s journeys, accurately mapping the plethora of smartphones, desktops, tablets and even stores that are visited before a penny is spent.
One thing is clear: modern marketers understand the critical importance of data. What they’re now figuring out is that by working together and sharing data, they can stand with the giants and significantly improve the customer shopping experience in the process.
John Gillan is managing director, UK and Northern Europe, at Criteo