In today's digital age, data has become a valuable commodity, especially for retailers. As retailers invest more in their loyalty programmes, eCommerce platforms and digital advertising, they generate large volumes of first party data that can be used to improve their marketing as well as the marketing of partner brands.
By commercialising this latter opportunity, retailers can win significant incremental revenue and profit against base trading positions. With the demise of the cookie, brands are desperate to access retailers first party data and are mobilising. Retailers too are reviewing their data and technology strategies to ensure they are set up for success.
When reviewing future strategies retailers should ensure they always maintain control of their first party data. No third party in the data or advertising technology space should be transferred ‘ownership’ of this valuable commodity. Put simply, the risks for retailers in losing control of their data are large. In this blog post, I’ll explore some of the reasons why retailers should work hard to maintain control of their first-party data.
Control a high value asset: Fuelled by brands interest in first party data, retail media is a huge commercial opportunity for retailers. Indeed, the market is projected to be worth more than linear TV in 2025. Retailers who win in this expanding market will see significant revenue and profit growth in the years ahead. This market is evolving at pace, and as such retailers should work to ensure that their commercial position isn’t tied to a particular partner. Indeed, retailers should ensure there is no future commercial risk to pivot providers should services levels drop or their offering fall behind the market.
Protect customer privacy: Retailers have a responsibility to protect customer data and ensure that it is handled in a responsible and transparent manner. By maintaining control of their first party data, retailers can ensure that customer data is collected, stored, and used in compliance with applicable privacy laws and regulations.
Improved data security: Data breaches and cyber-attacks can have significant financial and reputational consequences for retailers. By maintaining control of their first party data, retailers can implement robust security measures and protect their data from unauthorised access and theft.
Transparent ROI: Retailers controlling their first party data will also control effectiveness reporting on advertising it powers. Ensuring key internal stakeholders have a true view of the value being driven to brand partners enabling confident decision making e.g., setting media investment rates.
Transparent commercials: Retailers commercialising first party data with brands need to know how much revenue and incremental revenue they are generating because of their efforts and internal investment. Keeping control of first party assets will ensure that investment levels are not at risk of ‘spin’ by key partners, ensuring confidence in all financial reporting.
In conclusion, it’s important in today’s retail media boom that retailers take the time to develop future facing strategies for retail media that maximise the value of their first party data whilst de-risking use of this sensitive data with brands.