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Home Digital The power of first party data

The power of first party data

by Jessica Weisman-Pitts
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The power of first party data

By Immy Ewbank, Senior Digital Strategist at Visualsoft

With retailers now having a greater amount of first-party customer data at their fingertips  it is increasingly important to look to first party data to craft advertising strategies. Ecommerce growth, by its nature, fuels data collection on buying habits, demographics, and preferences, meaning the wealth is always building. It’s a worthwhile investment. A study from FT Strategies found a relationship between profitability and developing first party data assets. The average percentage of logged-in users (which is a building block for first party data collection) for very profitable organisations was 11% – versus a mere 5% for loss making businesses.

Collecting data

It can be hard to know where to start. Organisations often get worried that first party data needs to be highly structured and in vast quantities, but this isn’t always the case. There are many different types, all at different scales. For example, data collection can be in the form of questionnaires and polls to a business’s target audience which can then be used for segmentation. Businesses can also look at verified segmentation from affiliate tools such as GoCertify for identifying particular groups like students. There is of course site data collection driven by visitors and activity on websites, and one that is often forgotten is enquiry forms. Looking closer to home for data collection and asking customers questions is a great way to understand who they are – and build a picture of the kind of audiences to target.

Even SMEs, with limited resources, can start leveraging first-party data effectively. Firstly, start small! Focus on one data source (e.g., email list) and one key metric (e.g., open rates) to build a foundation. Free analytics tools from website platforms can be a great starting point to understanding more about an audience. Businesses will want to keep an objective in mind so that data collection has a focus and stops them going down a rabbit hole of information.

In a world where privacy and safety are paramount, it is key to be transparent. Anonymised and aggregated data is essential for privacy compliance. Transparency in data collection and usage builds trust with customers. And building the customer’s trust can increase the degree of first party data able to be obtained, as customers may be more willing to fill in collection methods such as a survey or opt in to provide extra information.

Using data

SMEs can layer anonymised first-party data such as purchase history and website behaviour with publicly available demographics and industry trends. This creates a customer profile informed by both direct interactions and broader market forces. Industry trends are easy to research using free versions of tools such as SimilarWeb.

Some key metrics SMEs should focus on when analysing first-party data for customer insights include website visits, conversion rates by channel, customer acquisition cost, and repeat purchases. These paint a picture of acquisition, engagement, and loyalty.

Once they have this data, there is no need to be overwhelmed. Some free data analysis platforms like Google’s Data Studio can bring clarity to SME’s analysis. Segmenting by behaviour (past purchases) and demographics (age, location) can be a great starting point. Retailers can also isolate particular audiences who would resonate with their campaign to maximise the impact!

How to leverage outcomes

Data-driven advertising offers superior targeting, personalisation, and campaign measurement compared to traditional broad reach approaches. By embracing retail data and collaborating, brands can unlock a new level of advertising effectiveness and customer engagement. Consumers want to feel that the product or experience they have is personal to them, and this new expectation means that brands need to deliver. In fact, McKinsey found that 76% of consumers now get frustrated when they aren’t met with personalisation.

Retailers offer ad space based on shopper insights through their first party data which is becoming increasingly valuable, creating a strategic partnership between the two. The benefit here is that advertisers can gain access to high-intent audiences, boosting campaign effectiveness and ROI. This might include specific targeting, utilising the data for actionable insights that reveal more about an audience and their preferences, or tailoring campaigns and touchpoints.

One great example of maximising first party data for a client in our portfolio, is from a home retailer. Our CRO team used the survey method to collect enquiries from customers coming on site about the products. This can identify blockers to purchase. The survey data collected indicated a high interest in “fire doors” and providing more information around them.

We leveraged SEO data to understand the website structure and address queries better by doing a content merge into a buying guide. We decided when to launch the campaign by reviewing the market with the client, and identifying the core USPs to promote through this. The campaign contributed to a wider campaign targeting safety, durability, and practicality messaging in January. Results showed a +26% YOY revenue growth and +71% Session Conversion Rate.

The future of data

Like everything else in the retail industry, the role of first-party data will evolve over the next few years. Expect even greater emphasis on building direct relationships with customers. Loyalty programmes and permission-based marketing will be crucial for gathering valuable data and personalising the shopping experience.

AI will become a bigger player and help deliver personalised product recommendations and promotions based on individual customer behaviour. Interactive surveys within the shopping journey can provide real-time feedback for continuous improvement.

Data doesn’t have to be intimidating. Think of it as information gathering, of the best kind. It is essentially a continual first party feedback loop that results in building a robust picture of who a retailer’s customers are and what they are doing, that brands can then leverage to deliver better campaigns, reach more audiences in different stages of the buying journey, and move them along from interest to intent to purchase – time and time again.

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Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.