Customer Data Platforms (CDPs) are among the most disruptive technologies we’ve seen in the last decade. As consumer behavior and preferences continue to evolve rapidly, marketing leaders are always looking for new solutions that will help them better understand their customers and engage with them on a more personal level.

CDPs have shown tremendous promise in addressing this need, as they serve as a reliable customer data management solution and an enabler of real-time, one-to-one personalization across channels. What’s more, they afford advanced analytics and reporting capabilities that help retailers make informed decisions across their marketing and customer engagement efforts. Investments in CDPs are therefore growing rapidly.

The global CDP market size is expected to grow from $2.4 billion in 2020 to $10.3 billion by 2025, at a CAGR of 34% during the forecast period.

CDPs have proven to be a key component of the MarTech stack, helping companies power digital-first strategies. Let’s dive deeper and look at five key marketing challenges that a CDP can solve.

Connected consumers expect a unified, omnichannel brand experience across all touchpoints. However, siloed data hinders retailers from meeting this expectation. To ensure a unified customer experience, you need unified data.

A CDP solution ingests customer data from disparate online and offline sources — website, mobile, eCommerce, POS, CRM, ERP, etc. — and serves as an always-available, integrated source of customer data, thereby eliminating silos. It democratizes data and helps other marketing systems access it for analysis and activation.

A CDP also helps marketers address the lack of a unified view of the customer. It gathers customer’s transactional, behavioral, and identity data, and links customer identifiers to create a 360-degree view of the customer. It merges multiple profiles a customer might have, a process known as deduplication, to build a golden customer record. This record serves as the single source of truth — helping retailers gain the intelligence and insights to run effective marketing campaigns that are personalized down to an individual.

54% of businesses say the lack of data quality and completeness is their biggest challenge to data-driven marketing success.

Sending generic campaigns to a broader audience is an approach that has become dated and ineffective. It’s important for businesses to get more granular with segmentation and send tailored offers and promotions at a preferred time and channel, to stay relevant in the intensely competitive retail space.

A real-time customer data platform solution leverages machine learning algorithms to create complex micro-segments using a combination of customers’ cross-channel data. This allows for persona-driven targeted marketing, which is essential to drive loyalty, improve customer lifetime value (CLTV), and reduce churn. Further, a CDP solution helps identify high-value segments as well as underserved segments — enabling retailers to identify revenue opportunities across their customer base.

91% of people say they’re more likely to shop with brands sending offers and recommendations that are relevant to them.

Businesses often overlook the fact that a shopper’s behavior, tastes, and preferences can change significantly over time. The offers and promotions that are relevant to a customer today may not be so after some time passes.

A CDP helps refresh a customer’s data over different time periods and gain insight into their past segment, current segment status, and reasons as to why this segment switch happened. It helps identify if a customer who is a frequent buyer is slipping into dormancy. Churn models can analyze this behavior and determine the likelihood to attrite. These insights enable retailers to take corrective action with attractive offers on products/brands of their choice, to minimize churn.

32% of new and current customers would stop doing business with a brand after just one negative experience even if they’d previously loved the brand’s customer service.

While marketers focus significant time, money, and effort on customer acquisition, it still remains a challenge. A CDP solution facilitates lookalike marketing, which is among the most efficient ways to expand the customer base. It helps retailers use insights pertaining to their existing high-value customer profiles to identify similar potential customers and target them with acquisition campaigns.

Lookalike is a more holistic approach to customer acquisition than broad segments based on age or gender. For instance, not all women in the age group of 30-35 years have the same interests. Whereas, two groups of people that have similar preferences around products, brands, channels, etc. are likely to be more responsive to the same campaigns and offers.

A CDP, with its built-in analytics models, helps surface deep customer insights and granular segments for effective customer acquisition. It helps marketers save acquisition costs by eliminating ‘spray and pray’ methods, aside from improving conversion rates and driving sales.

Personalization can reduce acquisition costs by up to 50%, lift revenues by 5-15%, and increase the efficiency of marketing spend by 10-30%.

A CDP helps with market basket analysis, which uses association mining to predict what products are likely to be purchased together. It provides a detailed view of each customer segment, covering data such as average revenue, brand affinity, basket size, and average days since the last purchase. This helps retailers better understand basket composition and identify customer affinities. A CDP solution, therefore, powers decision intelligence to make relevant cross-sell and upsell recommendations, which translate to improved campaign response rates, CTLV, and revenue.

Upsell and cross-sell strategies are solely responsible for 10-30% of eCommerce revenues.

With the proliferation of marketing channels and the ever-growing volumes of data they generate, it is paramount for retailers to invest in a CDP to make sense of the deluge of customer data and drive customer-centric digital strategies. ADA Global’s real-time CDP is designed to meet this need and help marketers eliminate the aforesaid challenges.

What differentiates ADA Global CDP solution?

• Real-Time Activation: Real-time activation of audience for contextually relevant connect in the moment
• Deep Customer Insights: Deep and granular customer insights using ML algorithms for a segment of one connect. Leverage Lookalike models for expanding the customer base, market basket analysis, affinity and association mining to grow customers with relevant cross- and upsell and churn analysis, and CLTV to build loyalty.
• Retail Focus: Comes with 150+ omnichannel strategies, 1,000+ KPIs out-of-the-box, 200+ pre-built reports to ensure rapid time to value

ADA’s Real-time CDP for Personalized Activation

To learn more about ADA Global CDP and determine if it is the right solution for your business, you can request a consultation here.

In this age of ever-evolving needs, tastes, and behavior of customers, how do retailers ensure they stay connected with customers? With everything going digital, this problem seems to be accentuated.

But wait… therein lies the opportunity!

With this mass exodus to digital, every customer touchpoint is a data point. Stitch them all together to get the full picture and the story as it unfolds. Is it beginning to sound like Jason Bourne’s attempt to discover his identity?

Honestly, this is more exciting.

Every day, retailers gather customer data from different sources which is a treasure trove of deep customer insights. The value of this data is in leveraging it to understand and address customer needs. Customer Data Platform (CDP) does exactly that: brings customer data from across sources into one place, cleans it up for analysis that throws up deep insights which is then used to engage with customers at an individual level, meeting their tastes and preferences of products, brands, channels, time & more.

Taking it to the next level is a real-time CDP – one that does all of the above in real-time as the customer engages with the brand. CDP is the cornerstone for retailers to drive personalized engagement and connect with customers ‘in the moment’.

This has enhanced the popularity of CDPs among marketers in the last year and the crisis has only accelerated the need. CDPs empower marketers with the speed, agility, and intelligence required to survive and thrive in this new world of digital.

Retail Customer Data Platforms are a marketer’s best friend. Once fully integrated, it can capture customer interaction data across multiple channels, unifies data, and translates that into meaningful, snackable information for marketers.

Data can be collected from any source be it CRMs, vendor and partner information, offline store purchases, social media, and more. This is done in a timely manner to facilitate quick decisions and can be done in real-time. The built-in capabilities (ecommerce personalization solutions, real-time activation, campaign orchestration) are one of the main allures of CDP, everything you might be looking for can be found in one place.

Advanced AI has the ability to quantify human needs into predictable patterns. By deriving information from customer intent and behavior across channels, it is possible for AI to create real time customer segmentation, customer attributes, and personas to provide deep insight into the lifetime value that each category brings in so that marketers can drive relevant engagement.

CDP solution today comes with in-built AI and ML functionalities that provide intelligent recommendations that align with business goals. Over time, AI and ML will only get better at predicting future behavior and understanding customer relations and their journeys.

Real-Time Processing is the need of the minute.

What this means is that CDP solution helps marketers manage large volumes of data flows with seamless ingress and egress integrations. CDP then analyses real time customer data profiles with minimal lag and provides prescriptive intelligence for the marketing team to make decisions. In today’s world where customer demands are ever-changing, a CDP helps marketers act quickly and accurately with decisions that are based on calculations.

Data privacy is a huge issue we face in today’s highly digitized world. A good Customer Data Platform will help businesses adhere to data privacy laws and manage consent while also enhancing the customer experience at more personal levels.

Data reveals that 90% of customers are willing to share their data for ease of experience. It is then up to businesses to be mindful of the use of this data and doing so can only lead to building trust between business and customers.

CDPs are shedding new light on how vast amounts of dynamic content personalization can be utilized by businesses with ease. Businesses and marketers alike are seeing the value it brings to a company’s growth. It is of little wonder that the global CDP market is said to grow from 2.4 billion USD in 2020 to 10.3 billion USD in 2025.

Now seems like the right time to invest. It is telling that, in 2020, while many industries experienced an economic slump due to the outbreak of the novel coronavirus, growth in the CDP sector surged. Reach out a real time CDP provider, if you haven’t already.

The article first published in AIthority

This article originally featured in RIS magazine on the 05/06/2021.

Retail has seen dramatic shifts in customer needs, tastes, and behavior, and the pandemic has upended many tried and tested marketing tactics. Digital-first now is the new normal with in-person shopping forced to take a back seat, with much of this shift is likely to stick for a long time to come.

E-commerce share of the revenue pie in the retail industry has doubled and, in some segments, quadrupled as well. Albertsons, for example, reported digital sales growth of 243% for the second quarter 2020.

Consumers spent $861.12 billion online with U.S. merchants in 2020, up an incredible 44% year over year, according to DigitalCommerce360 estimates. That’s the highest annual U.S. ecommerce growth in at least two decades. It’s also nearly triple the 15.1% jump in 2019.

Insights of the 2008 financial crisis showed that companies that led with CX gained three times as much as the market average in terms of shareholder returns and rebounded more rapidly as well. The performance of these CX leaders during the financial crisis serves as a helpful guide for companies hustling to do business amidst the global pandemic today.

Some retailers are better equipped to handle the shift in consumer behavior, while others are struggling between physical and digital realms. For those retailers who are looking to up their customer engagement game in the channel of their choosing, here is how the right customer data platform, or CDP, can be utilized as a powerful agent of change.

Creating a unified, 360-degree view of the customer that is also actionable is the most fundamental step in creating superior CX for customers. For example, sending two “personalized” emails to the same person is hardly that!

A CDP solution should be capable of ingesting heaps of data from a variety of sources — e-commerce, mobile app, stores, kiosks, CRM, ERP, DMP, etc., match, deduplicate, and fill in the gaps with any customer information that may be missing. While a lot of this is explicit data captured in other systems, advanced CDPs can also derive implicit insights, from search intent, affinities from prior purchases (such as brand and/or category affinity) and much more.

CDP can also analyze this unified customer data using advanced AI algorithms to create granular, look-alike micro segments of the “best customers” or households, and track and analyze real time customer segmentation and their migration as they happen, enabling retail marketers to drive personalized retail engagement throughout the customer lifecycle.

Zara, the Spanish apparel retailer that specializes in fast fashion, has invested over $1 billion to boost its online game. Zara has consolidated its business through the use of big data by gathering information from online social media and surveys to understand customer segments. The information is then used to make fast predictions of customer needs, helping them meet customer demands more quickly than their competitors.

In marketing, timing is everything. Brands are required to communicate more often and especially at crucial journey “moments” or they end up losing the opportunity to mesmerize and capture their audience. Real-time CDPs provide real-time audience activation, which helps orchestrate relevant campaigns and communication before they leave your properties. Engaging with customers in the moment is a key differentiator that very few retailers can boast of, and a real-time CDP solution enables this.

For example, quick service restaurants can send customized offers on their mobile based on customer location or day part. No more “10% off on Margherita pizza at Fremont” when the customer is miles away in San Jose!

Retail customer data platforms have enabled ecommerce personalization solutions at scale, an area in marketing that is capable of adding $1.7 trillion to $3 trillion in new value according to McKinsey & Co. And brands are looking to unlock this potential.

With deep knowledge of customers and personas provided by CDP, retailers can now activate a one-to-one personalization customer experience. Modern CDPs bundle advanced personalization module, which needs to be contextually sensitive and a continuous algorithmic testing engine, which ensures that the right decisions are being made automatically with every interaction in real time. From landing pages to the entire commerce funnel, retailers can ensure a highly relevant and engaging experience, improving both customer satisfaction and conversion.

With machine learning-based algorithms for inventory demand prediction, assortment planning, store clustering, size pack optimization, product rationalization and discount pricing, retailers can ensure the right availability across all points of sale, including store and digital.

For example, QSRs could personalize the menu when the customer opens the app for placing an order. By using a CDP to analyze a customer’s purchase history, it will be easy to infer if they are a vegan. Based on this, the most relevant menu items are listed on top of their menu.

Latest innovations include deep learning-based recommendations, where retailers can replicate the rich in-store experience digitally with advanced Visual AI and text/NLP-based personalization in real time, mimicking human-like curation.

Building trust between the brand and the customer is a business priority. With GDPR and other regulatory requirements around customer data privacy and security becoming mandatory, CDP solution helps manage known and unknown PII data and consent to comply with these norms.

The laws and regulations surrounding data protection has made first-party, consent-driven data collection more important than ever for companies.

Perhaps the most important, but most retailers are unable to link their retail customer data platform to the core of their retail business. They continue to treat this investment as another silo, except for the marketing team. A retail-focused CDP brings together demand-focused data, and combines with customer-centric merchandising and buyer planning.

With machine learning-based algorithms for demand forecasting, assortment planning, store clustering, size pack optimization, product rationalization and discount pricing, retailers can ensure the right store replenishment availability across all points of sale, including store and digital.

Pandemic or not, the next normal is still taking shape, and like your grown kid who refuses to move out, digital is here to stay with us for the long term. Retailers who invest in CDP technologies will drive differentiated CX across channels, accomplish the delicate balancing act of optimizing for immediate conversions as well as long term customer value.

Raj Badrinath, CMO, ADA Global