Consumer Data: A Fork in The Road

Betsy Stewart

Amazon was a rising Seattle startup when I took a post-college customer service job there in the late 90s, answering calls from 5am - 2pm. “Yes! We now carry CDs!” My first temporary chair was a keg of beer with a pillow on top — which I shared with the person working the late shift. What was consumer data like back then, at the beginning of ecommerce? Or prior to that, before the internet. There was direct mail in the 80s, more robust persona-based marketing later on, and now big data and AI learning. All-in-all: efforts to gather information to frame other information to incentivize an action, most likely a purchase. Data about us – shoppers – has been around since shopping began and in the modern age in particular is extremely powerful and important. "Digital made data currency."

Consumer data can be approached broadly in three categories: Personal includes demographics like age, income, and ethnicity; Preferential encompasses values and preferences; Behavioral information is related to how we interact with a store plus past purchases. Consider the history of consumer data from the perspective of brands and retailers. Originally for both, there was only access to transactional information: the product and the price. Item identified, amount tendered, product sold: customer data wasn’t captured. But from the earliest exchanges, retailers had an edge: you. 

When a shopkeeper sells a shopper gumballs, both The Shop and Gum, Inc know the gumballs have been sold. Let’s say in the past, the gumball shopper chatted in the shop, mentioning their favorite flavors and a preference for paying in nickels all while admiring the licorice ropes. The next time the gumball shopper goes to The Shop, the candies are bunched around the register with a sign: buy gumballs from Gum, Inc and get 50% off The Shop’s new line of $.10 licorice. The gumball shopper’s sweet tooth is smiling and The Shop is thrilled. The data road forked. What does this dynamic look like today? 

Data has been on a journey of type and refinement with digital enabling a massive transformation. Initial loyalty programs signed up customers for a specific store card, but people shared those or used them inconsistently and the value for marketing was murky. Point-of-sale advancements (like entering a phone number) developed as another way to make a repeatable association - this piece of information can be tied back to a customer record and aggregated. Ecommerce really exploded the conversation. Websites arrived, shoppers created passwords and saved payment and address details, CRM technology developed. Broader, deeper consumer profiles evolved based on digital interactions and transaction history with the accelerating data accentuating the retailer-brand divide.

Ecommerce created a huge opportunity for retailers to collect direct, or first-party data about consumers. Relying more heavily on less potent third-party purchased information created a gap for brands, particularly with signals from Google around cookies and data deprecation. “Retailers really have the front edge of the engagement piece today because that’s where the consumer comes to purchase their products,” according to Tom Corey, VP Consulting Services, Wunderman Thompson. “When we think about brands, it’s all about engagement. Beyond one-touch engagements, it’s about forming a relationship.” And any relationship is formed through interaction and energy and communication. Importantly, these interactions — every interaction — should exemplify and amplify the brand pillars. What’s core, what’s unique, what makes a brand a brand. 

But brands are saddled with a question, continues Corey: “How to engage with consumers and get consumers to engage - with a step removed.” Should this reality be viewed as an additional challenge or an additional opportunity? Here, brands have an edge: the brand itself. Brands can nimbly respond through their relationship with consumers. What does that mean? It’s all about loyalty. 

“Retailers, in driving loyalty, have put together this rich data set.” How can brands generate consumer loyalty? “It’s really about a value exchange,” states Corey. “Consumers are willing to engage if there are benefits that align with brand pillars and are important enough to exchange their data and time.” Take care of your customers and their data. Embrace the value exchange and transparency. Be thoughtful about the brand’s current approach to data ethics and what the future should be. Go beyond compliance. How brands treat their data is a ‘point of differentiation’ Small points of differentiation may someday make the biggest difference. Be what consumers expect you to be. 

Brands need to refine their strategies, develop new tactics, and focus on what they can control. The power shift is ongoing and ever-evolving, whether it’s an end-cap at a Big Box retailer or a spot on the digital shelf.

Is there another option or middle ground? It’s common for brands and retailers to make agreements to be designated as a sole provider. In the old days, you might choose a food chain because it offered either Coke or Pepsi. Today, certain brands are found only at Home Depot and certain other brands only at Lowe’s, to some mutual brand/retailer benefit. Another tool for brands is in equitably transparent partnership. According to Corey, “Second-party consortiums can be used to gather insights and create a stronger data repository. It’s a huge opportunity that in a way can be equitable for everyone.”

There are now 8 billion people in the world. We read that subsequent generations who are lucky enough to have spending power will demand more transparency, more environmental accountability, and more social justice. Today, people across many backgrounds are savvy about issues like climate change. They’re curious about recommerce. They understand that their choices ultimately drive change and in any brand-retailer-tug-of-war, their data (personal, preferential, behavioral) is important and powerful and as valuable as their money; it is truly the currency of commerce.

Continue the consumer data conversation with Tom Corey, VP Consulting Services, Wunderman Thompson on the latest episode of Commerce Confidential