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3 Reasons Why Retailers Need a Customer Data Platform (CDP)

Retail Market Overview

The retail industry has faced numerous challenges in recent years, including balancing physical and online presence, adapting to changing consumer attitudes, and navigating product availability issues. The pandemic has only added to these challenges, forcing retailers to adapt and evolve their operations to meet changing consumer demands.
Besides that, also the way retailers used customer data evolved exponentially with COVID-19. E-commerce dominated over in-store shopping, and hybrid shopping became commonplace as people prioritised social distancing. Even the way people pay for their items has changed, with many now embracing contactless methods that were assumed to reach more mass adoption years from now.

As customers’ shopping journey became more and more seamless, the ability to quickly access and use real-time data became essential for retailers’ success. By making the pivot to using real-time data, retail chains can make smarter decisions faster, preserve and expand customer loyalty, and stay ahead of the competition.

Fortunately, the retail category is inherently data-rich: Varying from online shopping pattern details to customer history and preferences, retail has an incredible amount of first-party customer data that can enable all retailers to capitalise on personalization and loyalty programmes if the data is collected, unified, segmented and activated in the most efficient way to gain a complete view of customer buying habits and preferences.

To stay ahead of the curve, therefore, retailers need to adopt modern data analytics pipelines so they can process and understand the data coming at them in real-time and activate their data to make customer-centric decisions. Personalised experiences across all customer interactions are essential for improving customer engagement and fostering loyalty. To achieve this objective, retailers can utilise a Customer Data Platforms that integrates data from various channels to provide a comprehensive understanding of customer behaviour and enables the evaluation and activation of the data.

Retailer Market trends in a nutshell

  • Retail is undergoing a massive technological remaking, and that trend will continue this year.
  • Consumer data protection remains a major concern for retailers, especially in the era of data privacy laws and sophisticated cyberattacks.
  • A focus on personalised customer experiences will be the key to differentiating brick-and-mortar retail from e-commerce shopping.
  • Selling via social media and e-commerce will continue to grow.

What is a Customer Data Platform?

CDPs are the type of software that aggregate customer data collected from a variety of sources, structure it into central customer profiles and then share data with other marketing technology systems.
CDPs build these customer profiles by combining data from a variety of stores across different data types, including first, second and third-party sources. That means that they can collect and organise data from the Company’s CRM, DMP, data lakes or warehouses, websites or mobile apps, and/or POS systems.
With these profiles created, marketers can then create audience segments, and activate them across other channels such as paid media, SMS marketing, customer service tools and even website personalisation.
The end result is the ability to not only manage data in a compliant and structured way, but also to be able to efficiently deliver targeted, personalised experiences at scale across the whole of the customer journey, bringing commercial outcomes in no time.

How will CDPs drive growth for retailers?

In the past two years, there has been a rapid and widespread transformation within the retail industry, moving away from traditional physical retail practices to omnichannel retail and digital commerce. This trend is projected to persist. In order to overcome the challenges posed by evolving consumer expectations and complicated supply chains, which have been exacerbated by the COVID-19 pandemic, brick-and-mortar retail must utilise data effectively. However, given the increasing number of data sources, channels, and direct-to-consumer options, retail brands must onboard new technologies and data management capabilities to cope with exponentially growing customer data silos.

Customer Data Platforms (CDP) are, therefore, a crucial tool for retail brands to analyse and activate data to improve and personalise the customer experience, to stay ahead of evolving customer expectations and competition. CDPs offer a broad range of benefits, including:

  • Delivering unified views of customers and their interactions across every touchpoint
  • Maintaining strict compliance and privacy standards in the handling of customer data
  • Creating the ability to activate customer data to deliver personalised experiences across every marketing and service channel.

Zeotap CDP customer 360 view

Getting in more specific details, CDPs for retailers are vital for:
Create a 360-degree view of the customer stitching online/offline data to be able to leverage personalisation to delight customers
The retail industry has seen significant growth in e-commerce, social commerce, apps and fidelity programs which determined a great increase in first-party data assets. Purchase volumes and frequencies are usually high and customers can be driven by value or price. With a great deal of actionable customer data, retailers must focus on improving the efficiency and addressability of their existing data by using Customer Data Platforms (CDPs) to create a 360-degree view of the customer. CDPs can help break down legacy data silos and bring together various data points, such as online behaviour, loyalty program and membership data, and offline data from CRM and POS systems.

Create a better segmentation of the target audience to be able to offer unique customers’ special moments on each preferred media platforms
Another benefit of using Customer Data Platforms for retailers is to create different audience segments based on different customer signals across the marketing funnel. Behavioural data collected through web and app data sources can be used to tailor messages and personalise branding campaigns. Using CRM data can help identify high spenders, loyalists, collectors, and dormant past brand enthusiasts. This information can be used to create segments based on purchase recency, frequency, and lifetime expenditure, and activate them across preferred marketing and advertising channels.
When it comes to activating these segments, CDPs can make the process seamless by providing native channel integrations such as TikTok, Snapchat, Facebook, and YouTube. They should also have the capability to achieve substantial match rates when pushing out first-party data, and have features that handle consent orchestration and privacy in accordance with GDPR regulations, or other data protection protocols, allowing customers to choose how, where and which data is being used.


Create time to value commercial outcome, leveraging on customers’ data and optimising the media budget
Many e-commerce and retail advertisers allocate a significant portion of their paid media budget to the Google advertising ecosystem. To optimise this spend, it can be beneficial to find a Customer Data Platform (CDP) that has a partnership with Google. These CDPs use partner APIs to populate matched segments directly in brands’ Google advertising accounts. This allows for faster data onboarding using a user-friendly interface and native connector, without the need for building an in-house Google Ads API or managing login credentials. Additionally, these CDPs can use additional first-party customer information, such as email addresses, phone numbers, and alternate emails, to increase the segment size. An example of such CDP is Zeotap, which uses proprietary identity stitching and extension capabilities to find emails corresponding to customers’ phone numbers and email addresses, and append these emails to the existing email list prior to uploading.

Guarantee Data Security and Customer Privacy
With the increase of digital data, customers are becoming more aware and concerned about data security breaches. Regulations such as GDPR in the EU are changing how organisations handle customer data. Failing to comply with these regulations can result in significant consequences for businesses. It is essential for retail brands to ensure data security across all systems. CDPs can assist in creating secure, compliant lists to adhere to the diverse data protection protocols, activating customer data putting consumer privacy and compliance front-and-centre.

Improve data-driven marketing through machine learning
In the digital world, companies collect and store an enormous amount of data that surpasses human capacity to process and comprehend. The automated ML models natively integrated in CDPs help to identify patterns and make it easy for marketer to create segments without depending on any technical team.

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