4 External Datasets to Help Retailers Make Smarter Decisions
Here are the crucial ways to utilize external data to focus on your customers through personalization, convenience, and shared values to drive your bottom line.
There is intense competition among today’s grocery retailers, and the average net profit margin for fast-moving consumer goods (FMCG) is only 2.5%. It’s worthwhile to explore data strategies that will give your business a competitive advantage. Internal data is often limited to the first-party data you collect or purchase histories of your customers. Fortunately, you can also take advantage of third-party and community data. And external data is not only useful but plentiful and easily available.
Here are some of the ways you can use external data to improve your customer insights, boost engagement, create value, expand service offerings, recognize growth opportunities, and more.
Focus on personalization
Goal: Personalize customer offers and interactions.
Where to get the data: Use keyword searches, social media posts, and demographic information.
How it helps: Customers want personalization. McKinsey reports that 72% of shoppers say they expect stores they frequent to know about their interests. And two-thirds say they expect tailored messaging and relevant recommendations.
You can achieve better personalization by extracting information about popular foods, brands, or recipes in the spaces your customers spend time. For example, there may be food, health, or lifestyle accounts that are popular with your customers. Based on user-generated content or content they engage with, you can extract information from social media platforms and plug it into your recommendation engine to create personalized experiences.
Similarly, you can add keyword searches to your recommendation system. Adding more granular information about topics like allergies, intolerances, and dietary requirements will make your system smarter and recommendations more personalized. You can also use demographic information like age, geographic area, etc., to make use of trends. For example, busy young professionals may be more likely to purchase ready-made meals than older shoppers or those with large families.
Aim for customer convenience
Goal: Provide customers with options for maximum convenience.
Where to get the data: Extract data from demographic information, keyword searches, and customer feedback, including reviews on Google, Yelp, and other crowd-sourced review sites.
How it helps: More than 80 percent of shoppers say convenience is more important than it was five years ago. When you have a better idea of the kinds of conveniences customers want, you can create those options. Use data parsing to find out what customers are saying about last-mile delivery preferences, common shopping frustrations, and trending consumer topics. You can use keyword searches to learn what kinds of last-mile delivery options customers are looking for. You can also glean customer insights from demographic information like age, income level, and transportation options. This information will help you formulate ideas for convenience offerings. For example, you may discover many working parents would like home delivery because they’re busy and/or don’t want to drive to the store.
Look at the community
Goal: Gain a better understanding of customer wants, needs, and preferences.
Where to get the data: You can get demographic information from apps, U.S. census surveys, other third-party surveys, or surveys you conduct.
How it helps: Learn more about customer purchase patterns and spending behavior based on demographic information. You can channel that data into creating customer loyalty programs with targeted offers and promotions. For example, if you know a neighborhood has a lot of young children, you can create timely offers for school lunches or road trip snacks.
Goal: Connect with customers who share your values.
Where to get the data: Use keyword searches and corporate social responsibility (CSR) reports—whether internal or by a third party—to learn what your customers care about and to align your actions with your brand values. You can also get data and resources from the United Nations 17 Sustainable Development Goals which include targets for Climate Action and Responsible Consumption and Production.
How it helps: In the U.S., 61% of consumers say sustainability is a key factor in their purchase decisions, and 77% of global consumers say it’s very important or moderately important for a brand to embrace sustainability and/or environmental responsibility. As consumers and companies embrace Environmental, Social, and Governance (ESG) policies, it pays to take notice of the data on sustainability and your customers’ priorities. Data can help you build a strategy around causes important to your brand or can help you look at new causes important to your customers.
Create a data-driven culture
Smart retailers are using the power of external data to fortify their internal datasets. Before you decide which external data sets to target, commit to adopting a data-centered mindset. When the entire organization understands the importance of data, it's easier to achieve your goals, whether they include growing your customer base, expanding service offerings, or improving the customer experience. And businesses that make the most of external data can gain the biggest competitive advantage.
Ready to become a data-driven organization? Contact us at email@example.com to set up a call.
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