2017 Is the Year of Open Data Systems for Retailer, Brands
Welcome to 2017, the year of transparent marketing data systems where data flows securely between retailers and brands. A new beginning for partnerships between retailers and brands is here. A new perspective on CRM and first-party data for increased sales and improved cross-channel measurement have taken hold.
This year, open data systems will be mainstream with both retailers and their brands exchanging data to power their marketing agendas. Target, one of the more recent retailers to announce the launch of an audience extension program, is currently enabling trusted suppliers to access their “guest” data to enrich their marketing programs. The company joins the likes of BestBuy, Amazon, and Walmart, who have established marketing data programs for greater impact and efficiency.
According to a recent study conducted by Forrester Consulting on behalf of ownerIQ, The Era of Second-Party Data is Here, these types of transparent data exchanges have taken off rapidly within the retail sector. And while 85 percent of retailers and durable goods brands will have audience data exchange initiatives integrated into their marketing strategies in the next twelve months, 51 percent of companies report having one right now. Underscoring the reality that open, transparent data systems for retailers and brands have not just caught on, they’re here to stay.
“Second-party data is more efficient [than first and third],” said Kevin Lyons, SVP and GM of eCommerce, hhgregg. “We can maximize that digital dollar and drive the conversion on the website and in the store.”
The past two years have highlighted trends of major retailers sharing their exclusive first-party data (aka partaking in a second-party data exchange) with suppliers of choice. And the shift to data sharing has paid off. To emphasize the importance of these strategies for retailers, the same Forrester study reports that nearly 70 percent of retailers are adopting open data systems for improved insights into customer wants and needs. Moving on to more concrete benefits, the study found that 56 percent have realized increased product sell-through, 54 percent saw an increase in sales, and 48 percent increased ROI.
But what about the brands these retailers are selling – where do they stand?
Brands are using the same transparent and secure systems to facilitate an audience data exchange. These companies are creating robust data pools to support their shared agendas and are realizing increased campaign efficiency. This is what refer to as the new normal.
“Because we no longer have a direct eCommerce channel…we’re very heavily involved with our retail partners’ channels now, which means that we’ve also started pursuing a lot of data sharing activity. We’ve been developing those over the past couple of years and more intensely over the past year,” said a Sr. Manager, Marketing & CRM at a durable goods company who participated in the Forrester survey.
This leads to brands craving innovative marketing data strategies. They realize their own highly qualified first-party data is finite, and third-party data sources are proving relentlessly obscure. To the point, 48 percent of durable goods manufacturers report having an open data exchange in place to support their marketing goals, according to the Forrester study. Moreover, 40 percent report greater targeting ability, yet another 40 percent report increased capacity to identify new or potential customers, and 48 percent report an improvement in sales.
And with 34 percent of durable good manufacturers reporting planning to implement a second-party data strategy over the next 12 months, the pervasiveness of data sharing within the retailer and brand space is unstoppable.
Take, for example, hhgregg, a leading retailer of consumer electronics and home appliances. The company wanted to increase awareness and sales of their CE and appliance products. By sharing their highly qualified consumer data with other major appliance manufacturers (such as LG), consumers visiting those brand’s sites or product pages were then funneled to an hhgregg location.
Fortunately, brands have now caught on to the low hanging fruit, sharing their coveted first-party data at scale with their retailers of choice, and powering their marketing agenda through the use of open data systems. This grants access to more of the right consumers searching for the very products retailers sell. These shoppers are out there, browsing the sites of the brands retailers carry; however, retailers leveraging the right data are the ones directing customers to their sites instead.
Retailers and brands are shying away from closed data systems of the past. The vast majority of retailers and brands in 2017 are bullish about adopting transparent data marketplaces and systems. The general mindset on data has taken a major shift, with open and secure data systems changing the way retailers and brands think about their own data.
The question is, are you a part of the majority adopting this new standard?