As analysts, researchers and journalists begin their advertising media wrap-up of the year, apart from the all-encompassing AI segment(s), important data points include the increasing rise of social commerce and e-commerce players.

Amidst all this, we couldn’t help but notice the emergence of an even more niche dataset, one that advertisers, marketers and agencies are turning more and more to: Retail Data.

“I think one of the most emerging trends, which is coming up in digital advertising is retail data. What it refers to is rich first-party data that belongs to retailers. And it can be anything from a shopping spend, purchase preferences, to shopping cart content, and loyalty programmes because retailers are sitting on a massive treasure of highly valuable opt-in data,” shared Tejinder Gill, General Manager, The Trade Desk.

Asserting that Retail Data will be a key focus area for brands in 2024, Gill says it will play a vital role. "Sometimes the only thing that I feel takes time is the entire integration part of it, the technical aspects of these things, but more and more retail partners are becoming very open to it because the data is authentic, and is just about the personas of these people. And you can actually target them outside the walled gardens in an open ecosystem space, which could be either on OTT or music streaming or CTV, as every marketer is looking out for scaled solutions."

Choicest Opt-i(o)n

Opt-in is the keyword here, as more and more brands, platforms, and indeed the entire digital ecosystem continue to prepare for the crumbling of the cookie and have optimized privacy controls and preferences. Because we as consumers complete our purchase with not just money, but also our 10-digit number or email ID and the entire persona they contain, retailers gain unique insights about customers that brands want.

Gill gives the example of going to a grocery store and giving your information as you’re checking out. “I feel that is the most highly valuable authentic data that can be possible. A - These are very real transactions done by you. So, I feel this is probably 100 per cent authentic, very much like first-party data. And it not only reveals your purchase intent, but it also tells advertisers how this customer will buy in the future.”

As Ummed Singh Kajla, Head Retail, at Cheil India, points out, “Retailers today collect data through the entire customer journey to enable them to make the right decisions that help improve the marketing ROI. This data helps improve the efficiency of every marketing rupee spent. The data collection starts from the store footfall and ends with the customer purchase. The first set of data collected is non-personal in nature – footfall, bounce rate and dwell time.”

This data helps organisations decide if they need to enhance the footfall or reduce the bounce. As the next step of the journey, the brands collect the “dwell time” data. This provides them not only insights into the time spent by customers in the store but also the time spent on each section or product in the store. These insights not only help plan the store layout and product placement but also the customer engagement with the retail staff.

“Once a customer moves from an exploration and discovery phase to a purchase phase then the brands collect personal and identifiable data. This data provides insights on customer purchase, the purchase history, frequency, ASP, basket size, repeat purchase etc.,” says Kajla.

Organisations also collect data on customers interested in products but don’t convert due to other reasons (stock, size, payment method etc). This data helps in future conversion campaigns. Coupled with additional information this also allows brands to understand the customers better and segment them for better marketing campaigns. The organisations also collect this data on a store level rather than only a national level so that the campaigns can be personalized and marketing initiatives become more targeted and effective.

Friends with Benefits

This becomes all the more important in a digital ecosystem increasingly divided by walled gardens, not just of GAFA, but global retailers like Walmart and eBay.

"Many retail giants operate within closed ecosystems, meaning that customers engage with various services with the same platform (e.g., e-commerce, loyalty programs, and online advertising). This closed-loop environment enables seamless data sharing and integration for more targeted advertising," says Arpita Dubey, Director of Marketing, India & APAC, Innova Solutions, a global provider of technology and business solutions.

It is a fact that most e-commerce platforms provide a huge consumer base but often act like black boxes when it comes to data. “This leaves brands flying in the dark, and highly dependent on the platforms to drive sales. Increasingly, it has become imperative for brands to collect more data to understand their audiences at a personal level. Earlier, this data was unavailable. As better data collection techniques are being established, brands can leverage a whole additional set of metrics to add to their existing first-party data, user behaviour and preferences,” says Dhaval Gupta, MD of CMRSL, the parent company of CMGalaxy (an AI-driven SaaS product).

“'Frenemies' is likely the accurate term to describe the relationship brands may share with marketplaces. Of course, brands do need to ensure they work within the ambit of policies set by Amazon or similar platforms and not antagonize them, while also ensuring positive ROAS consistently,” he says.

And speaking of ROAS, Gill says retail data addresses another major issue in programmatic and performance advertising, especially since it measures the entire purchase journey of a consumer. “For marketers, they can close the loop with measurement because that has been the biggest problem in our industry: attribution. However, with real-world sales, the products a consumer bought and whether they bought it online or in a physical store after getting exposed to it, all this data can cover the loop. I would say this is the most precious data which can be very much leveraged by advertisers.”

Dubey adds that retailers are increasingly relying on ad-driven revenue to supplement their core business income. “This incentivizes them to provide rich data insights to advertisers and foster mutually beneficial partnerships. Retail Media data allows for hyper-personalization of advertising content. Marketers can deliver highly relevant and timely messages to consumers, increasing the likelihood of conversion.”

Caveat Emptor

Despite this new glut of valuable data though, certain precautions, not to mention niceties, need to be observed.

Deepak Goel, Founder and CEO at Drizzlin Media, observes, “While we all know that data is the future, but with every sphere, even in media and advertising, the usage of this data comes with its fair share of risk and challenges, including data privacy and compliance, as well as its accuracy and reliability. Then comes the quality of data as well as maintaining security.”

Dubey elaborates, “The challenges (to retail data) constitute data privacy and security concerns. It is becoming imperative for retailers to navigate stringent data protection regulations and establish trust with customers regarding data handling. Data integration is often complex, with data spread across various systems and platforms, which is where technologies like stores operations and OPS, eCommerce, Omnichannel Orchestration and Merchandising and supply chain play a critical role.”

She further says, “Data security is another critical concern, as breaches can result in financial losses and harm to brand reputation. Finally, customer opt-in for data collection, especially for specific data usage, can be challenging, requiring strategies to obtain customer consent. In summary, retail media data offers significant benefits, but its use requires careful consideration of privacy, integration, quality, security, and consent.”