5 ways retailers can balance personalisation with transparency

The world of retail has undergone a seismic shift in recent years, and the impact is being felt across the industry. For decades, the biggest advertising budget guaranteed the greatest reach, but those days are long gone. The rise of social media has given small indie brands a platform to compete and collaborate with influencers, leaving the big players struggling to keep up.
To thrive in today’s fast-paced and dynamic retail environment, UK beauty retailers and CPGs must embrace the power of data and use it to bridge the gap between their customers’ needs and their business objectives. By collecting and analysing customer data, brands can create personalised experiences that engage consumers across all channels from direct-to-consumer (D2C) to indirect channels.

And with the ability to measure the impact of their efforts, they can continuously optimise their strategies to drive sales and build long-lasting customer relationships. The data-driven economy may seem daunting, but with the right tools and mindset, CPGs and other retailers can unlock unprecedented growth and success.

Putting privacy first

However, before retailers and CPGs can dive into best practices, they must have a crystal clear understanding of privacy internally. In today’s digital world, data is a double-edged sword. It serves as both the lifeblood of the retail industry whilst also representing one of the most tightly regulated and potentially risky aspects of a brand’s operations.

That’s where the UK’s Data Protection Act and General Data Protection Regulation (GDPR) come in, designed to safeguard consumer privacy and ensure that consent is always given.  Compliance with these laws is not only an ethical responsibility but a financial one too, with penalties of up to €20 million or 4% of annual global turnover for non-compliance, whichever is higher. Yet, according to research, more than half (52%) of UK businesses are still not fully GDPR compliant.

Considering that 88% of online shoppers in the UK say they would stop using brands and organisations that don’t value consumer data privacy, this is especially concerning. Brands that fail to prioritise data privacy risk reputational damage, legal and financial consequences and ultimately, losing the trust of their customers.

Embracing a unified data strategy

The brands that are getting it right, however, employ a unified data strategy, which allows for more efficient and accurate data management. This includes suppressing customers who have opted out of communications and then being able to maintain the integrity of that information across all channels. By understanding the types of data, where it’s stored and how it’s collected and used, marketers can make informed decisions and tailor their strategies to meet the unique needs of their customers.

Investing in customer data platforms (CDPs) enables companies to track, manage and integrate customer data across all touchpoints, resulting in a more cohesive and personalised experience for customers. This not only improves the customer experience but also saves time and resources whilst keeping companies compliant with privacy laws

With a unified data strategy in place, companies can build trust with their customers by providing personalised experiences based on accurate and relevant data.

The power of unique first-party data reach

With the right privacy parameters in place, it’s time to prioritise first-party data. Succeeding in today’s dynamic landscape requires emphasising unique reach over third-party data and walled gardens. This means shifting focus towards a brand’s owned and second-party data ecosystem.

Unique reach is about reaching genuine, high-fit customers and growing that number over time. It means obsessing over name collection, focusing on big opportunity segments alongside 1:1 personalisation and improving the ability to maintain that reach across paid and owned channels.

This, in turn, allows retailers and CPGs to maximise ROI and improve measurability of campaigns to prove the value of their first-party data efforts. To make a real impact on consumer behavior and capture market share, CPG companies need scalability. Without it, even the best customer data and personalisation strategies fall short in demonstrating meaningful ROI.

There are five main benefits of unique, first-party data reach, including:

Enhanced channel control: Ability to own and control channel strategy, driving customer traffic to D2C or indirect retail channels more effectively than retailers alone.

Increased collaboration: Motivates retailers to participate in second-party data clean room solutions, fostering increased collaboration and shared success.

Cost-effective customer engagement: Shifts focus to lower-cost channels for re-engaging customers, improving customer acquisition costs and driving growth.

Valuable M&A insights: Provides valuable insights into M&A opportunities and potential for new customer growth.

Informed decision-making: Enables smarter, more informed decisions for long-term success.

Challenge accepted: Unlocking the full potential of first-party data

One of the challenges to building a first-party data set with unique reach is maintaining scale throughout the supply chain of data. This includes collecting data to organising it, building segments, orchestrating segments across channels and finally, measuring. CPGs are finding the deprecation of cookie-based digital identifiers is resulting in significant data erosion of audiences.

This loss is often manifested in the form of subpar “match rates” when orchestrating first-party data into their publishers. Such limitations impede scale and undermine critical measurement programs that are essential in justifying further investment in customer-centric initiatives.

Therefore, unique reach from first-party data is a critical strategy for CPGs and retailers looking to succeed in today’s marketplace. It positions them to drive growth, improve customer engagement and achieve the scale they need to generate meaningful business impact. With the right strategies and tools in place, CPGs can unlock the full potential of their first-party data.

Lessons from the beauty industry

Before I joined Amperity in 2017, I worked with global beauty conglomerates Estee Lauder and L’Oréal, helping them make better use of data to unlock incredible experiences and emerge as industry leaders. During my time there, I learnt a lot through trial and error.

Here are three key takeaways to thrive as a retailer whilst balancing privacy and personalisation:

Don’t do anything that would put consumer data at risk: When you spend over a century building your brands, there is no action you could take to earn a little extra money that would be worth damaging any of them.

Destroy trust, destroy the relationship with the customer: Privacy is everything. There was a time when there wasn’t a surefire way to give the marketing team the data they needed in a way that was privacy-compliant. But now there is. Amperity is a proven, scalable solution to brands’ identity resolution problems. The brands that work with us know that we’re going to keep inventing software solutions and interoperability to the dynamic ecosystem. As it changes, Amperity is evolving right along with it.

Figure out collaboration: With the demise of third-party cookies, second-party data collaboration in clean rooms is crucial. Scaling D2C, first-party data requires privacy-safe collaboration with retailers. Finding secure tools that meet legal and privacy requirements can be challenging. For most businesses and retail media networks exploring collaboration, extensive experimentation is necessary. Prioritise consumer transparency and involve them in the collaboration process, ensuring they understand and acknowledge it. Communicate the purpose of collaboration as enhancing their experience.

Winning with first-party data

Bottom line: The old ways are changing. Third-party cookies are being phased out by major browsers and privacy regulations are in full force. On top of that, customers are demanding greater privacy and control of their data.

But one thing hasn’t changed: Customers still demand personalisation. Retailers and CPGs must find new ways to balance personalisation with privacy. This means shifting their focus towards privacy-centric strategies that respect customers’ data and preferences.

With a deep understanding of their customers, personalised experiences across channels and an unwavering commitment to privacy, UK retailers and CPGs can not only navigate the ever-changing retail landscape but also outshine their competition and win the hearts of their customers.

Matthew Lubeck, Vice President EMEA, Amperity

Matthew is the vice president of EMEA where he is responsible for the commercial expansion of Amperity, a leading customer data platform trusted by brands like Reckitt, Under Armour and Wyndham Hotels & Resorts. Lubeck joined Amperity in 2017 to help launch the company and has served in a number of key roles building sales, customer success, and marketing functions. Matthew established Amperity’s LGBTQ employee resource group (ERG) and is a trusted advisor and customer-centricity change agent to the C-suite across leading consumer brands.

Prior to Amperity, Lubeck spent 10 years with global beauty conglomerates Estee Lauder Group and L’Oréal as Group Head of Customer Data Strategy and Analytics, leading 30 brands across luxury, mass and salon professional divisions to better use data & unlock incredible beauty experiences, establishing L’Oreal as an industry leader. He resides in London with his husband and four-year-old daughter.

About Amperity

Amperity delivers the data confidence brands need to unlock growth by truly knowing their customers. With Amperity, brands can build a first-party data foundation to fuel customer acquisition and retention, personalise experiences that build loyalty, and manage privacy compliance. Using patented AI and ML methods, Amperity stitches together all customer interactions to build a unified view that seamlessly connects to marketing and technology tools. More than 400 brands worldwide rely on Amperity to turn data into business value, including Alaska Airlines, DICK’S Sporting Goods, Endeavour Drinks, Planet Fitness, Seattle Sounders FC, Under Armour and Wyndham Hotels & Resorts. For more information, visit amperity.com or follow us on Linkedin, Twitter, Facebook and Instagram.