Brands versus retailers – it’s a battle that has rumbled on throughout the ages. The contest is more magnified now in the digital age with the Internet playing host to online discount retailers as consumers look for the cheapest bargains.
Retailers are leading the way when it comes to winning custom. When once upon a time, consumers would buy into a brand’s message, style and values, the tables have now turned. Millennials have embraced a DIY approach to shopping, with a wealth of choice and information at their fingertips. Recent research has shown that only 7% of millennials identify themselves as brand loyalists.
So, what can be done from a brand perspective to ensure they can remain relevant in today’s volatile climate?
One big topic that harmonises retailers and brands is data. We already know the power it can provide both – insights on customer behaviour, purchasing patterns and where and when they like to shop. The rise of online shopping, combined with the social media boom, has opened up a host of new channels for brands and retailers to promote their message, which in return, leaves them with a mountain of actionable customer data.
Making sense of this data and acting upon it has proved a blessing and curse for marketers. Done right, it can help target and convert new customers, retain existing ones, and, ultimately, boost sales. Done wrong, customers will turn their back on you, spread the word among their peers, and head off to a competitor.
So if retailers and brands have the same end goal – winning and retaining custom – why can’t they operate together to help achieve this? Surely the combination of two sets of data on a single customer is better than one? But how do brands and retailers set about doing this? The answer lies in second-party data.
Take any supermarket and Coca-Cola for example. The brand (Coca-Cola) is responsible for developing the product but arguably knows little about the end-user, given the majority of sales come through the retailer (the supermarket).
It’s within the interests of the brand to work with the retailer to obtain customer data that enables it to tailor its product marketing for current audiences. For example, targeting paid media to lapsed buyers and measuring the in-store sales impact of that paid media. In addition to a potential new revenue stream, the benefit for the retailer is a more engaged brand that invests more in paid media and brand-funded promotions.
As shopping patterns and behaviours continue to evolve, the future will always remain uncertain for both brands and retailers. The next big phenomenon is always ready to shake up the industry once again. Second-party data is a powerful tool if handled correctly. It’s how brands and retailers can work in harmony to build relationships with their customers and ultimately remain relevant and profitable.
Steve Martin is managing director of international data at LiveRamp
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