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How retailers can beat the Amazon effect by utilizing data to win hearts, minds and wallets

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Credit: DAC

As of 2018, Amazon has grown its share of online and overall retail to 49 percent and 5 percent, respectively, according to eMarketer. The company has accomplished this by being the fastest, most effective user of customer data to improve the shopping experience. Consumers have made clear through their shifting purchase behaviors that they reward the companies that personalize their experiences, use data to make the shopping process easier and faster and provide content and information that enhances their journey.

Retailers that have met shifting consumer expectations by activating data have thrived, whether they're previously established ones like Apple, Sephora and Ikea or recent upstarts such as Warby Parker, Casper and Monica + Andy.

While we are on the cusp of a new era of data-powered retail experiences, consumer backlash has been mounting against the expansive collection and leveraging of their data. The most noteworthy examples of this has been the volume of complaints against Facebook (and to a lesser extent Google) about how it has monetized our data for their own gain.

Similarly, as more details about the power of location tracking have come to light, consumers are increasingly uneasy about how this data is collected and sold to brands to target them. And governments are acting as well, most significantly with the General Data Protection Regulation (GDPR) in the European Union and the soon-to-be-implemented California Consumer Privacy Act (CCPA). As these feelings—and regulations—spread across a wider portion of the population, retailers will need to adapt the types of data they rely on to enhance experiences.

At DAC, we see immense value in the power of activating local data without running afoul of breaching customers' privacy or their creepiness sensors. Here are a few types of data that we leverage:

  • Search data: Search Query Reports and Google Trends data provide insight into how consumers are looking for brands and products. They shed light on the increasing volume of "OK Google" voice searches on mobile and home devices that trend toward long-tail queries, especially those that lean toward localization.
  • Social data: Most native social media analytics as well as third-party social monitoring tools provide geographic data about how users in different locations react to and engage with your brand and content.
  • Web and marketing analytics: Enterprise analytics platforms provide location insights about how users interact and convert with your content and digital advertising.
  • Sales data: Aggregate e-commerce and in-store sales data provide a wealth of insight into how purchase behavior, product and style preferences vary by geography.
  • CRM data: First-party customer data tells you where your current customers are. When combined with third-party data like census data, this can identify under- and over-represented areas.

Some of the ways this data can be activated include:

  • Paid search and shopping: Geo-target paid search, product listing ads and local inventory ads based on the products and styles that have high demand in the local market will lead to greater return on ad spend. Leverage location extensions and use ad copy to drive customers to nearby locations to facilitate cross-channel shopping outcomes.
  • Social and display: Boosting the kind of content that is sure to engage a key local market will increase engagement and reach in social channels. Geo-fence display and mobile campaigns based on drive-time analysis and customer density to increase efficiency.
  • SEO/on-site content: With Google's organic search algorithm and results page changes, not to mention the growth of mobile and voice search, increased value is placed on locally relevant content. Create on-page articles, images, videos and tools based on local sales insights (e.g., top style trends in Chicago) to bring more users to your site earlier in their purchase journey.
  • Influencers and off-site content: Activate influencers with followings in local target markets. Focus on content that will resonate with each market to create mutually beneficial relationships that build reach.

The impact of leveraging and activating local data to drive multichannel retail outcomes is striking. As experienced by DAC retail clients like Bridgestone, Vera Bradley and Wickes, in-store conversion improved by more than 60 percent, online revenue by more than 30 percent and return on investment by more than 25 percent.

Utilizing local data and executing these tactics will give brands a greater understanding of how consumers behave and of how to create better shopping experiences for them—without violating users' privacy or exploiting their personal data. Just as important, following such a strategy will put brands in the strongest position to fight the Amazon effect.

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DAC is one of the largest independent digital media agencies in North America, with a growing international presence and offices in the U.S., Canada and Europe. We drive transformational growth for our clients with integrated, data-driven solutions. We combine best-in-class digital media expertise with deep knowledge of our clients’ businesses to strategically engage customers, no matter who they are and—uniquely—where they are.