When consumer data drives, retailers and brands win

In a tight race for customers, knowledge, insight and strategy are the engine that beats the competition.

In brief

• Uncertain economic times can bring opportunities for brands and retailers
• Consumer data is the key to driving an experience-led consumer journey
• Marketing optimization, hyper-personalization, and end-to-end visibility are the building blocks of success
  

Consumers are continually reshaping the retail and brand landscape — minute by minute, click by click and purchase by purchase — all generating a massive volume of real-time buyer data.

In uncertain economic conditions, it can seem like a steep challenge to define a strategy for moving forward in a “multispeed world,” as Gregory Daco, EY-Parthenon Chief Economist, points out. Yet, for brands and retailers, periods of disruption offer a remarkable opportunity to capture the hearts and minds of consumers, who are also experiencing constant uncertainty and are eager for a sense of quality, service and stability.

Data integration should be the first investment for retailers and brands looking beyond top- and bottom-line impacts to meet the pricing challenges created by the current consumer market head winds.

A deep understanding of the interdependencies of enterprise data is vital to aligning an organization’s sales and marketing thesis to its growth commitments. Both long-term focus and immediate execution of that strategy are needed to define consumer expectations and create consumer experiences that can be trusted — driving long-term value.

Retailers and brands need to ask themselves,

Are you simply collecting data, or are you connecting data?

The distinction between a routine consumer journey and an experience-led consumer journey is the difference between business as usual and progress toward growth and success. The creation of a consumer-centric experience becomes a revenue driver in the market, elevating the buying decision process to a level that elicits not only a positive response, but brand loyalty, repeat purchases as well as new ones, and profit growth stemming from an earned reputation and brand image cultivated by consumers themselves.

This new paradigm is future-forward thinking for retailers and brands, and it’s driven almost entirely by data and the insights it can offer. Using the wealth of available information will distinguish your brand and service, building meaningful connections with current and future consumers.

A successful approach to becoming consumer-centric is built on consumer data, thoughtfully integrated across the business, all connected by available buyer-driven information.

With a data-driven strategy, retailers and brands can steer consumers in the right direction.

Data should be the foundation underpinning three core pillars: optimized marketing, end-to-end visibility and hyper-personalization. These require integration across several organizational functions. Breaking the experience-led consumer journey down to Sx5 — sense, suggest, supply, sell and service — can be an effective way to steer the consumer experience.

Weaving data throughout the Sx5 approach supports informed scenario decision-making, driving toward enterprise-wide KPIs.

Creating a data-driven strategy

The conscious connection and integration of consumer data across all business functions is the advantage that will create the consumer experience and generate revenue and margin for retailers and brands moving forward. Most companies understand the need for these capabilities at the ideation level. However, they still need to overcome the institutional and technical barriers to connect the dots between insight and execution at scale as business functions are siloed and application is immediate and tactical rather than broadly strategic.

Companies must move to retaining and expanding existing consumers rather than casting fruitlessly for new ones, making informed and goal-oriented decisions rather than maintaining the status quo, and connecting data rather than simply collecting data. That is future thinking.

Growth happens naturally when a retailer or brand is integrated across the business by a shared focus on the consumer experience, reaching the right consumer in the right place at the right time.

Your consumer data has a voice, but are you listening?

The challenge is integrating the pieces of the puzzle to produce a seamless process, from optimized marketing to end-to-end product visibility to the hyper-personalization that ultimately creates an experience beyond simply driving a purchase. Along the way, what most retailers and brands tend to shortchange is the use of data to connect the dots and inform their strategy. A positive consumer experience underpins and promotes retail and brand growth, loyalty, operational efficiency and market differentiation. Of the many complex factors at play in a personalized consumer experience, three are foundational for a viable strategy, the precise application of data and measurable outcomes: marketing optimization, data-driven end-to-end visibility and hyper-personalization.

1. Marketing optimization

In a world of limitless choices, a targeted focus and specificity build brands and breed success. The key is to know your consumers and reach them where they live, work, shop and seek entertainment — both physically and digitally.

Consumers have a growing expectation of authentic messaging conveyed in meaningful touch points. This calls for a marketing strategy that can identify ideal audiences and follow them through their discovery and shopping journey across multiple media and shopping channels. Collaboration among chief marketing officers, chief financial officers and chief digital officers is critical to addressing the challenges posed by the increasing number of channels that reach consumers.

As buyer behavior evolves, consumer data has become an essential asset for brands and retailers to drive awareness and conversion. Leveraging data for a meaningful impact demands the technology, process and agility to take channel-specific action on the insights it illuminates. New data and capabilities put pressure on budgets and partnerships, such as agencies and technology vendors, which raises the stakes even higher for measuring and optimizing the overall marketing spend.

Internal understanding, agreement and prioritization of the brands, services, products, markets and customers with the highest growth potential should substantiate and reconcile the flow of the investment in marketing them. And aligning this internal investment with externally facing strategy requires C-suite teaming with group presidents and business unit leaders, bringing all commercial functions and activities into executional alignment.

Do you know where your consumers are and — more importantly — what they value?

2. Data-driven strategy for end-to-end visibility

From an operations perspective, businesses need to anticipate what consumers want, where and when. Consumer data should directly guide decisions from the supply chain through to the point of sale. But this is a missed opportunity for many retailers and brands due to their siloed operations.

Chief supply chain officers, chief digital officers and chief information officers should work together to solve for market resiliency, transparency across inventory and delivery, sustainability and social impact of products or services, and price comparisons.

To create long-term value and effective operations, companies should be able to address real-time visibility and inventory availability, integrated planning and fulfillment optimization, and end-to-end supply chain orchestration. There is no question that retailers and brands have these functions on their radar and have been addressing them. The advantage is doing so simultaneously, in an integrated fashion, to provide a wholistic and differentiated consumer experience.

Having the right items available in the right places at the right time defines long-range growth and success. By optimizing processes, capital and product inventory, companies also can strategically align employee assets across all functions.

Leveraging data to understand consumer priorities is foundational. For example, with 60% of US consumers agreeing that companies have a responsibility for driving positive social and environmental change, retailers and brands can turn touch points into trust points.

Do you know your consumer consciousness score?

3. Hyper-personalization

Once brands and retailers apply data to big-picture decisions, they can and should mine consumer data for deeper insights into their buyer potential. Data capabilities have advanced far beyond showing us what consumers have historically bought so we can sell them more of the same. Consumers’ demographics, social communities and interests reveal not only what they have purchased, but what they might buy — before they even know it themselves.

Chief digital officers, chief marketing officers, chief data officers and chief information officers are at the epicenter of consumer evolution in real time. As a result of nonlinear consumer journeys across a multitude of touch points, disjointed buyer data, consumers’ expectations to be served anytime and anywhere across channels, and the demand to manage an ecosystem of channel partners, a cross-functional strategy is critical to delivering a hyper-personalized experience.

Delivering successfully on this journey strengthens the consumer relationship by elevating the consumer persona — from merely knowing what they’ve historically bought to understanding who they are, what they care about, their personal community and what they have the potential to buy. By expanding on the traditional definition of the golden record or source of truth, retailers and brands can apply data to marketing strategies, interlocking buyer personas with segmentation and points of sale, to discover a tremendous new growth potential.

Where will you make the connection?

Paving the way for a consumer-led journey

Crafting a trustworthy consumer experience requires deliberate prioritization of both a long-term focus and swift action, accounting for capital, talent, inventory, consumer expectations and loyalty.

The experience-led consumer journey is strategically crafted from the integration of marketing optimization, visibility across operations and hyper-personalization, leading to the point of purchase and far beyond in the marketplace of consumer judgment, loyalty and decision-making. Prioritizing these three focus areas can provide a roadmap to the near- and long-term investments that can help minimize the highs and lows caused by constant disruption.

The core advantage that many retailers and brands overlook is the application of data to knit together these strands. When data gains its power, new insights emerge and strategy thrives. With the right analysis and application, data can be the connecting thread leading to new and unexpected patterns of innovation and growth.

Jay Dennis contributed to this article.