Q Thoughts

When Sharing Customer Data Makes Sense


Also featured in Internet Retailer on April 27, 2016.

A brand that provides retailers with customer data may sell more.

I’ve got some good news and some bad news. According to Forrester Research, 50 percent of visitors coming to your website intend to buy a product within 30 days. That’s the good news. The bad news: that doesn’t mean they’re buying your product. A visit to your website is just that, a visit – you’re in the consideration set but that doesn’t mean you will necessarily be chosen. This is why so many marketers love retargeting. It allows them to communicate with these “going-to-buy-real-soon” shoppers after they have left a website to bring them back to buy. But when we stop to consider where the actual purchase is going to occur (hint, it’s not the brand’s website), the need for a different approach becomes obvious.

The new strategy isn’t a stretch. It simply goes beyond what we’re used to doing by taking advantage of what’s not working and getting creative.

Consider this: Very few shoppers – perhaps as few as 10 percent – will actually buy from a brand’s website directly. If you think about it, this makes a lot of sense. People may visit the brand’s website to learn about the product, sure, but they’re turning to a retailer to make the purchase. Despite the fact, many brands are spending all of their retargeting dollars to support a direct channel responsible for 8 or 10 percent of their sales. Huh?

Does this mean retargeting doesn’t make sense? Not at all. It simply means that brands – and their retail partners – should join forces to make retargeting work more effectively,  while helping to maximize their sales opportunities in both channels. A new way of thinking about data is making this possible in ways it simply wasn’t in the past. By sharing data with specific partners and in targeted ways, 1+1 can equal more than two. It may seem mystifying, but it’s true.

Advertisers of all types struggle to answer the question: How do I re-engage browsers and turn them into buyers? For digital marketers at a brand selling products through both direct and retail channels, this is the wrong question and it has led to poor decisions and wasted impressions. For these brands, this approach is based on the following (incorrect) assumption: a purchase, if one were to happen, would occur through the direct channel. While the logic may be sound, the problem is that this is inconsistent with shoppers’ actual channel preference, which skews overwhelming toward retail.

The more important question for brands to ask is: How do I re-engage browsers and turn them into buyers by encouraging them to purchase my product through whatever channel they prefer?Asking this very question leads to different answers, different decisions, and different outcomes. One of the most important realizations is that for retargeting to work most effectively it needs to be considered as broadly as possible. This means working with retail channel partners at the data level to create campaigns that really work.

The sharing economy is happening, and it’s surely (and not so slowly) changing the way we live our lives. If you’re not a participant in one way or another, you’re failing to realize the benefits of alternatives that are only continuing to grow. Thing is, the inevitability of change doesn’t have to be daunting. As long as there’s mutual trust, or transparency, involved in the sharing process everyone can come out a winner. And when full transparency is combined with tight control and accurate measurement on both ends, the advantages become palpable – and most importantly, mutual.

The idea of sharing data can – and does – work when done right. Different brands have a different tolerance for this kind of data partnership, but in every case brands should have complete control over how their data is used, when it is used, where it is used, and by whom it is used.

  • Toe-Dippers – Many brands start off this way. They only share data with a small handful of key retailers at minimum budgets and then carefully monitor for any possible hint of a drop in direct sales.
  • Pragmatists – Other brands are more analytical in their approach. They may identify a portion of their audience that they believe are less likely to buy direct. This is often based on how recently a prospect visited their site. The assumption is the more recent the visit, the more responsive a shopper will be to an e-commerce ad. The more time that passes, the less likely they are to respond to direct ads. The marketers may create a recency parameter around data access that only allows retailers to target cookies that are a specific number of days old.
  • All-In – Finally, there are brands that are fully committed. These marketers grant access to their first-party data to as many retailers as possible. They still have rules for usage, for example, campaigns must be retailer funded, must include specific creative, etc. They are all about applying as much marketing muscle as possible to support their brands and products, regardless of which channel the sale actually occurs.

For many brands there is a leap of faith required to move beyond the conventional approach of hoarding data and protecting the direct channel. Establishing a data sharing strategy that grants their retailer partners a measure of access to their retargeting pool can help to maximize their sales opportunities in both channels. As with any change effort, this can be a challenge. For brands looking to break through, sharing data may be the most effective path forward.

Brands need to embrace this evolution; but in too many cases a brand’s e-commerce team, which may have enjoyed a monopoly over the retargeting pool, view sharing their data as a potential “threat.” Limiting the value of data to simply supporting direct sales misses the point and opportunity presented by the sharing economy. Marketers need to think broadly and move beyond their own fiefdoms to consider how their actions can support overall corporate goals. It’s fine to start by dipping a toe in the water but it shouldn’t end there. It can’t end there. As Spock so eloquently said, sometimes, “the needs of the many outweigh the needs of the few.”

This article is also featured in Internet Retailer. Access it here.

Categories:Posts from 2016


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