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How a CDP Can Help Retailers Improve Customer Segmentation

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The retail industry has a pressing focus on personalization strategies and techniques and CDPs are helping deliver better results through improved segmentation.

This article is part 3 of a 4 part series, sponsored by Arm Treasaure Data

The shift towards personalization in marketing programs is a key step for organizations moving to a unified customer experience across all touchpoints. Omnichannel personalized messaging programs focus on providing consistent, targeted and relevant content to the right customer at the right time. This is imperative for companies to accomplish since, according to an L2 report on customers' ad frustrations, 52% of consumers surveyed say they are likely to switch brands if a brand does not make an effort to personalize communications.

There is no industry where there is a more pressing focus on personalization strategies and techniques than in retail. Retailers have enormous amounts of customer data, but they need it all in one place to be able to learn from it and make better decisions on how an individual shopper behaves at each point in the sales journey. With this information and understanding, a retailer can decide which products to sell individual customers and how to bring them back for future purchases.

The ideal customer data management solution for a retailer’s use-cases is the customer data platform (CDP). A CDP is the natural evolution of the CRM and DMP, unifying data from disparate silos into a single, centralized repository, giving marketers a 360-degree view of their customers and allowing for cross-channel personalization. CDPs also help you to target and understand an individual customer, not an anonymous group, allowing you to target them much more effectively with personalized messaging.

“Rather than relying on margin-eroding, mass-market promotions, retailers should be refocusing their efforts on high-value customers that actually deliver most of the profit. This is about much more than a refreshed CRM strategy. Rather, it is about taking all of a retailer’s customer and product insights and changing how they operate from the ground up,” says Karen Voelker, Global Lead of Accenture’s Customer Innovation Network.

The ability to improve audience segmentation and do more precise targeting is something that 62% of marketers say is a top priority, according to a survey by Winterberry Group and the Data & Marketing Association on audience segmentation. And while 71% of marketers still look at basic demographics and behavioral data like search and past purchases, according to CMO Council and RedPoint Global, only 40% of retailers’ measure brand loyalty and affinity, and only 22% examine psychographic data.

The opportunity is here for retailers to get a full understanding of their customers and target them more effectively by deploying a CDP in their martech stack. The following are a few case studies of highly-successful retailers who were able to use CDPs as their centralized customer data management solution for omnichannel personalization.

Related Article: An Overview of Customer Data Platforms (CDPs)

Case Study: Kirin Does Omnichannel Personalization

Kirin is a successful beverage and liquor company that has nearly 100 products across multiple brands, each having its own website that collects customer data. Like many others, the company works with several ad agencies, and each of them needs its own particular data set to tune campaigns and assets more strategically. In addition to their websites, Kirin also has an ecommerce subscription business, external publishing sites, and stores they need to all keep aligned and in synch.

Learning Opportunities

With this many sources of customer data, Kirin needed to bring it all together to allow them to understand their customers better, and be able to visualize and analyze their behavior. One of their challenges was to not only deliver a digital experience to their customers, but a unified experience across digital and offline journeys, including in their factory tours and brick-and-mortar stores. For Kirin, an omnichannel personalization strategy is just what they needed.

While Kirin already had an existing in-house data management solution that was adequate to store customer data in individual silos, it couldn’t deliver the omnichannel capabilities necessary to bring the offline and online experiences together. Kirin needed a solution that would be able to clean all that data and stitch it together into a single repository that could then be used for personalized omnichannel marketing across all customer touchpoints.

Kirin chose the ARM Treasure Data Enterprise CDP to collect and analyze customer data across all digital channels, as well as offline data such as sales events and storefront activities. After a data transfer exercise in moving data from the old data solution to the new CDP, Kirin was able to augment and unify online browsing data and promotional event data, yielding new insights for optimizing and improving marketing campaign performance.

With an enterprise-grade CDP solution, Kirin developed customer-centric personalization campaigns across all touchpoints to improve sales, increase purchase frequency and improved customer lifetime value. By analyzing customer behavioral data, they were able to generate profiles of their best customers and create lookalike targeted customer segments, to push the perfect content, to the right customer, at the right time.

Related Download: How to Evaluate a CDP: 4 Top Considerations

Case Study: Shiseido Delivers One-to-One Customer Experiences

Shiseido is a global beauty brand that wanted to create a one-to-one loyalty marketing program powered by customer data. With a loyalty program that has been around since 1937, updated to a digital app in 2012 that allows customers to browse catalogs, order products, search for stores and get expert advice and recommendations, Shiseido had lots of customer data that needed to be brought together and joined to create a single ID. To solve this they brought to bear an ARM Treasure Data CDP to analyze historical purchase data, demographic data and customer behavior data, all at the same time.

Shiseido’s primary challenge was to integrate their own 1st party data with 3rd party data from various DMPs into their new CDP. After they had done data integration into the ARM Treasure Data CDP, Shiseido could now accurately assess each customer’s preferences and correlate analysis with customer behavior, allowing them to design communication on their loyalty app to their customers’ needs.

Shiseido not only hit its goal of personalizing the customer experience, but modeling customer preferences resulted in a 20% in-store revenue increase per loyalty program member and a 38% growth in net income YOY.

Conclusion

A CDP is a must-have for retailers that have outgrown their traditional CRM and DMP solutions. A CDP gives a retailer the ability to grab and integrate data from all the places their customers interact with them, then segment and target those customers much more effectively, down to the individual unique ID. With that depth of segmentation, you can run integrated personalization campaigns that target high-value customers with relevant offers and products through any channel they prefer.

About the Author

Treasure Data

Treasure Data is a global leader in Customer Data Platforms (CDP) and enterprise data management. Providing the ability to aggregate and translate massive volumes of scattered and siloed data. Connect with Treasure Data:

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