In the turbulent and ever-changing retail sector, there is one thing which is certain. Playing the same game you always have is going to get you nowhere. In an increasingly data-driven world, the champions of retail in the future will be those that have fully realised the value of their own data and have made the transformation into media brands of their own. Here, Graeme Finneberg, country manager UK of Mediarithmics, explains more.
Given the demise of some of retails biggest and best known brands in recent years, those who have survived thus far have undoubtedly relied on their agility; their innate ability to continually review every facet of their operation and flex accordingly to cater to market changes or customer demands has become the norm for most retailers. That said, there is one aspect of the mix which remains well below the radar in the vast majority of operations – their data.
For a modern retailer, their data is one of their most valuable assets yet it is rarely utilised as a revenue source. To take this concept even further, this realisation could form the basis of an entirely new media strategy whereby the retailer actually becomes the media brand. Because this is such as revolutionary idea, it often helps to provide an illustration, albeit a hypothetical one.
In this example, let’s assume that Sony is willing to provide its CRM data to Curry’s, who in turn will review this alongside their own data. Curry’s would be able to clearly identify which of Sony’s customers were browsing for these products on their website, as well as those who were interested in competitor brands. They would then be able to produce highly personalised retargeting or email campaigns from Sony directly to these customers, utilising Sony’s creative assets and essentially becoming a full-service offering to brands.
In the real world this approach is already gaining traction with Amazon presenting a classic case example. In many ways, Amazon displays qualities that even the best online retailers lack, but by far their biggest differentiator is their ability to use and monetise their data.
For retailers, this approach provides a much needed lifeline to rebuild their position within the economic ecosystem. For advertisers, it offers an exciting and lucrative source of digital ad inventory, whilst also delivering in areas where trade marketing often lacks, such as measurement and attribution.
It can also help advertisers to target new customers and markets, such as a car manufacturer targeting those searching for baby-related items, using the logic that they may well be looking for a bigger, more spacious car to accommodate their new arrival. What this process reveals is that when it comes to data, both retailers and brands have ownership of essential slices of consumer ‘pie’. When all parties are working together to create stronger, more enlightened relationships, based on detailed insight and real time data, it is clear that everyone is going to win.
For Mediarithmics retail clients, this approach has enabled an increase in overall margins by 5 to 25 percent after two years. A new generation of universal data marketing platforms are providing retailers with the ability to house all their data and disseminate appropriate campaigns to customers in real time. This also has equal appeal to DTC brands that are resellers for other brands as they tend to operate in niche markets, making them attractive to advertisers who wish to reach their highly specific audiences. However, in order for this to work, retailers must have the technology that allows them to manage and control ALL of their data – end to end.
It is a given that retailers who want to truly harness the power of their data will need to dedicate new resource and expertise to manage the various elements of the process, including running the campaigns, interpreting the data and selling in the campaigns to prospective brands. There is no denying that it is likely to involve a complete 360 degree shift in the way they view both their data and their relationships with the brands they work with, but the reality is that the scale of rewards from investing in such a strategy are simply too large to ignore.
It’s about a change of mindset. True, as a retailer, the goal is to sell products to clients. But if we widen the thinking to include in this role that to be successful, we should also help product manufacturers to sell and market their products to end-clients, retailers could then increase their remit to include operating online campaigns for product manufacturers direct to customers.
It is no longer a case of if a retailer will embrace this approach, but when.
End-to-End Data Management Platform, Mediarithmics was recently named as one of Retail CIO Outlook’s top 10 E-Commerce Solution Providers for 2019. Please contact Graeme Finneberg for more information on the bespoke solutions that Mediarithmics offer: email@example.com 07968762606
(A Retail Times’ sponsored article)