The Retailer Winter Edition 2023

THE RE TA I L ER

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FIVE WAYS RETAILERS WILL EMBRACE THE DATA ECONOMY IN 2023

Paul Winsor Industry Principal Retail & CPG Snowflake

I n an increasingly complex and competitive market, data offers substantial opportu nities for retailers and CPG companies to diversify and grow.

Data monetisation will offer new diversification possibilities

Data monetisation isn’t a new concept. In fact, retailers have been mon etising sales and stock data for decades. But there’s been little appetite to drive revenue from anonymised customer data due to security and compliance concerns – not to mention a false perception that customers will object to their data being resold. As more brands move to the cloud and realise the sophisticated data governance and sharing capabilities it offers, 2023 looks like the year where data monetisation will dominate boardroom conversations. By monetising their data correctly – as demonstrated by US retail data science company 84.51˚ – to make better business decisions, and streamlining howconsumer packaged goods (CPG) companies can acquire this data, brands stand to benefit from a significant new revenue stream. Only the top retail media networks will survive According to a recent estimation by BCG , the retail media market –where third parties buy advertising space on a retailer’s platform – will grow by a quarter each year over the next five years. And it will account for 25% of digital media spend, or $100 billion, by 2026. This shouldn’t come as a surprise. As costs are squeezed, and online growth slows, retailers are increasingly looking beyond traditional channels to launch or expand their retail media platforms. But this also means that there will be substantial competition in the space. As more brands realise the opportunity to attract CPG buyers without needing to scale, it’s likely that only between the top 5 and 10 retail media networks will survive. Those that thrivewill offer maximumvalue through greater performance measurement standardisation, leading to a booming, albeit concentrated, advertising ecosystem. Watch this space.

Retailers have it tough. Not only have they weathered a pandemic that created once-in-a-generation supply chain disruption, but now, they’re gripped by an economic crisis that’s seen consumer demand drop to historic lows, meaning most are fighting even harder for market share. Gone are the days when brands could stay competitive through innova tive ecommerce and outstanding customer service. To stay relevant in 2023 and earn the custom of those reluctant to spend, retailers need the agility to manage macroeconomic trends. Failure to do so will only see more recognisable brands hit the headlines for the wrong reasons. Here are five ways I predict retailers will embrace data as a key differ entiator in 2023. Immersive experiences will encourage new engagement As macroeconomic factors continue to increase consumer uncertainty, it’s more important than ever for brands to collect, process, and analyse insightful customer data. But in return for their data, customers expect greater personalisation. One innovative way to do this is through in-store immersive retail experiences. Think of it as blending the ecommerce and bricks and mortar worlds, where technology can create unique and differentiated shopping experiences that improve CX. Moreover, these experiences create a significant opportunity for brands to capture critical first-party data on their customers’ habits and needs – funnelled through propensity and recommendation models to fuel unique insights. It’s something I recently discussed with River Island CIOAdamWarne . By using radio frequency identification (RFID) tagging in its new “smart” changing rooms, River Island offers its customers ecommerce-style insights and gains invaluable product performance data in return.

greater personalisation.” ‘‘

In return for their data, customers expect