Why Zero-Party Data Underpins Retail Marketing

Over the last few years, zero-party data has helped redefine the goal of retail marketing. In fact, retailers today have a unique opportunity to reimagine the shopping experience entirely.

Now, success doesn’t just come from acquiring new customers. It’s about acquiring the right customers, getting them to stick around, and using all available insights to drive more engaged customers.

Insights provided by guest author: Rebecca Trivella, Commercial Director at 3radical, an Allant Group Technology Partner

So how exactly does zero-party data help? Why is zero-party so important to retail marketing? And how can zero-party data overhaul your overall marketing approach across the entire customer lifecycle, from acquisition to conversion, retention, and loyalty?

Let’s get started.

Why should zero-party data underpin marketing in retail?

So that we’re all on the same page, let’s start by defining zero-party data. (Feel free to skip ahead to the next section if you’ve got this covered.)

Zero-party data is data collected directly from consumers, rather than inferred or through other sources. For example, if you create a pop-up and ask consumers about themselves and what they are interested in – the information you collect is zero-party data.

Why is zero party data so important to retailers? Because evolving consumer spending habits and behavior, paired with macroeconomic conditions, is forcing marketers to innovate as they deal with complexities.

Think about it. While understanding customers has always been important, for a long time the industry has used other data sources, such as third-party data, cookies, or running surveys that are a moment in time on a small sample. But changes in data privacy coupled with the opportunity afforded by digital means it’s time to do the right thing.

By directly collecting data from consumers, you can get complete and up-to-date insight into their needs and preferences. This type of data collection drastically improves customer experience and provides more personalized experiences.

How zero-party data can underpin retail marketing in 2023

As we’ve just seen, zero-party data is poised to revolutionize retail marketing by providing retailers with direct and voluntary insights from their customers, allowing them to create more personalized and effective marketing strategies.

With this in mind, here are the top five ways zero party data underpins retail marketing in 2023 and beyond:

#1 Ensure every interaction provides value creation

Every retailer has huge targets to hit. But you can’t let your customers feel like they’re just another number. Instead, every interaction you have with each individual customer needs to create value in some way.

Zero-party data provides this value by understanding customers on a deeper level to create experiences and products that better meet buyer needs.

This not only improves consumer experiences but also increases sales, conversions rates, loyalty, and much more.

Essentially, collecting this data leads to the ultimate value exchange between consumers and your brand. And with 60% of consumers more likely to become repeat buyers after a personalized shopping experience, this is a fact that’s hard to ignore.

#2 Discover more about your most valuable customers

If you’re ready to take the guesswork out of selling and find out more about your most high-value customers, this is where zero-party data can really help.

By gathering zero-party data, you can leverage customer insights to understand exactly who is browsing your website (and other channels) and what they are looking for to tailor the experience to them.

The more personalized you make the customer journey the better. With the right data and gamification tools in play, you won’t have to guess whether someone is interested in your products or whether they would be a good fit.

You’ll be able to instantly answer all these questions:

What might our most high-value customers want to buy next? (For instance, if they are off on a sun holiday, they most likely are looking for sun cream, different clothing, and other products)
Equally important, what are they NOT buying from you and why? Are they buying deodorant, shampoo, conditioner at the supermarket and only makeup and medicines from Boots or Superdrug, for example?
What are the exact preferences, i.e. sizes, patterns, use cases?
What brought them to our website and why did they enter their contact details?

#3 Comply with data protection regulations

With the Government reintroducing its revised Data Protection and Digital Information bill – i.e. The GDPR replacement bill – data protection regulations are firmly back on the agenda.

The good news is, zero-party data is a game-changer for data privacy and protection. At its core, zero-party data is about putting consumers first.

Instead of using passive opt-in forms, zero-party data requires consumers to actively provide consent, usually in exchange for something they value, like discount codes, product recommendations, or loyalty rewards.

And if you’re open and transparent about why you are collecting data with clear consent, your audience will likely feel comfortable providing it.

And let’s be honest – relying on third-party cookies has never felt right.

When consumers have control over their personal data, everyone wins. And when customers give consent for how their personal information is used, you can prove they have opt-in permission.

#4 Gain high-quality data

It’s no secret that many retailers rely heavily on data to inform many activities, from product development and strategic planning, to targeted marketing campaigns.

Yet while there is more data than ever before, there are vast differences in data quality.

The good news is, zero-party data gives retailers a better quality of information instead of using third-party data to gather potentially outdated or inaccurate details.

When you collect zero-party data, you are directly asking your audience for their information, leaving no room for assumptions or inferences.

You’ll gain high-quality data and more trusting consumer relationships that lead to strong customer loyalty.

And the more you use zero-party data, the more you’ll uncover, and the more success you’ll see.

#5 Align to consumer purchasing habits

Returns are a part of the shopper experience, but retailers can circumvent the impacts by being in tune with customer expectations and needs.

Collecting zero-party data can support consumers with their product selection, to help shoppers choose the right product the first time, which can help curb the growing trend of returns and increase customer satisfaction.

Take Stitch Fix for example. In 2021, the fashion company took personalization to the next level by offering real-time personalization for each and every customer, by focusing on collecting zero-party data. The brand then used this data to show consumers ready-to-buy clothing that matches their budget, style, and body type, and preferred aesthetic.