The data you own on consumers is the most valuable asset your e-commerce brand can possibly attain. That data is how you position yourself for success. If you’re not collecting, you’re not understanding your consumers. And if you don’t understand them, how can you plan for success in the future?
Traditional retail has been doing this for years with credit cards and reward programs. Companies like Best Buy, Macy’s, Target, and many others have pushed credit cards and reward programs because they’ve realized the importance of having first-party data on consumer purchasing. The larger the number of consumers using these programs, the more valuable the information becomes.
An individual purchase isn’t going to be overly valuable. But combining the information on all purchases paints a very clear picture of consumer trends. This allows for the understanding of what customers are purchasing, how much they are willing to spend, the time period when they could be most vulnerable to advertising, and more. These companies have long been positioning their stores accordingly based on what that data suggests.
The same is true in e-commerce. If you’re not collecting your first-party data and analyzing on a monthly basis, you’re not going to be able to make predictions on inventory levels or understand the what and why of consumer purchases. Thus, you have very little chance of being ready for a key event such as Cyber Monday.
How you use and manipulate your first-party consumer data is vitally important to your success going forward. — John Max Bolling
Amazon provides a very clear example displaying the importance of owning online-shopper data. The undisputed top option for most online shoppers, Amazon has become a data-gathering machine to analyze how long people spend shopping for an item, what items people are searching for, and much more at a very large scale. It doesn’t have to guess how shoppers behave, it already knows. That’s in large part because instead of focusing on analyzing competitors, Amazon has placed its main focus on analyzing customers. Today, Amazon has grown to a point where it also uses data to move into any purchasing category where it sees an opportunity for success.
Understanding how to gain and use first-party data is extremely important for the future. The collection of the right information isn’t the difficult part. It’s simply about maintaining strong customer-relationship management. As long as you’re a good steward, you’ll be fine. However, knowing how to thoughtfully analyze that data and use it to take steps toward success can be a challenge.
When considering how to apply the knowledge you’ve gained on consumers, you must place the utmost importance on customer lifetime value. That needs to be your top metric dictating how you assess and deploy all other actions in your funnel. It’s essential because if you want to grow and effectively apply what you’ve gathered, you have to understand what needs to be done to build a lasting relationship with your customers. Otherwise, you risk having a bunch of data with no direction on what to do next.