Across the globe, living standards are falling. In the UK, the OBR estimated the biggest drop in living standards since records began six decades ago; household incomes are to come crashing down by 7% over the next two years, undoing a decade of growth and recovery from the financial crisis. Consumers will not be the only ones to experience such gravity: a fall in disposable incomes, amid a falling economy, will create a vicious cycle in which individual financial pressures trickle down to business revenues; quite different from the feudal boom that ‘trickle-down’ enthusiasts were advocating only a couple of months ago.
Of course, it was their disastrous experiment that exposed Britain’s economy, exacerbating pre-existing issues of supply chain shortages and global inflationary pressures which have given rise to the accursed ‘cost-of-living crisis’, now prevalent across the country.
In short, retailers, ecommerce sites, and CPG brands will all find a severely depressed consumer base with limited spending power. This presents great uncertainty for businesses and leaves little room for mistakes; enhanced consumer understanding will become essential to informing product development and reshaping the customer journey. For, with a dampened market, alongside increasing overheads, the costly price of unprofitable product development may trigger insolvency.
Avoiding fatal mistakes: consumer data
Ultimately, in such perilous times, the need to understand customers – their habits, wants and product needs – is ever more vital. Retailers must be able to reach and incentivise their target customers with relevant and personalised offers. Additionally, retailers seeking to avoid fatal mistakes and costly disasters must take advantage of consumer data.
Consumer data is a powerful tool for businesses, especially retailers and application developers, for whom so much cost occurs in development and production. Successful products must meet consumer demand. Yet meeting this demand requires innovation to be closely aligned with collective consumer conscience. While grasping such an intangible quality may seem impossible, consumer data holds a quantifiable analysis of consumer insights which are integral to understanding the macro movements within markets.
This data can explore various aspects of consumer habits, such as when and how frequently they shop, the types of products they buy, and how much they spend across various sectors. However, the most powerful consumer data is distilled down to the product level.
Product-level data offers an itemised analysis of consumer purchasing, allowing spending and product patterns to be discerned across brands and product types, revealing areas for market growth. It unveils the full contents of the Amazon shopping basket so to speak.
Most powerfully, it allows brands to identify their own product failings and where further investment is required. Suppose Adidas have identified that although sales remain high across clothing, trainers are failing to perform as expected. Itemised consumer data allows Adidas to analyse the spending behaviour of its customers who instead buy trainers from Nike. Specifically, it allows them to understand the types of Nike trainers they are buying – are running, basketball, or Air Max trainers most popular? Such detailed insights would allow Adidas to understand why competing products are succeeding, gaps they can capitalise on, and where different parts of the market are booming. Most importantly, it allows them to avoid the costly mistake of unwanted products. While giant companies like Adidas may be able to weather such misfortunes, the consequences for small businesses in today’s economy could be devastating.
Clearly, itemised data is immensely powerful, but it is equally as rare. It is nearly impossible to collect over the counter and even online there are many challenges, with retailers only able to collect data from their individual sites and more novel methods requiring explicit consent from a consumer base still debating the line between privacy and the digital economy.
Direct-to-consumer marketing platforms: an untapped data resource
Overall, when applied correctly, consumer data provides a silver bullet against the malignant attacks of a poor economy. As such, demand for consumer data is set to boom – understanding how to access it is important. For the most part, successful data brokers will package these for retailers and brands. However, even they have failed to take full advantage of an untapped raw source: direct-to-consumer marketing platforms.
Direct-to-consumer marketing platforms are those which allow companies to, as the name suggests, directly market to consumers. Uniquely, they can offer this ability because of the intrinsic deal the platforms strike with consumers at the point of entry: consumers are offered cash rewards in exchange for access to their shopping data. As a result, these platforms are a prolific source of first-party data, which includes itemised expenditure ranging from the world’s largest ecommerce sites, like Amazon, to app-based purchases across digital stores such as Google Play. While the powers of such platforms to enhance marketing are well known, their rich source of first-party, product-level data has been overlooked. Moreover, compared to the challenges of collecting such data in stores, they provide a remarkably simple and prolific solution.
Although there are other sources of such data, direct-to-consumer marketing platforms are by far the most moral. Whereas other sources offer consumers no reward for their data, direct-to-consumer marketing platforms have been overturning decades of digital hegemony by commissioning consumers for access to their data: resetting a fundamental right that, ultimately, digital data is the property of its creator – the user, the consumer.
Such platforms uniquely reward all parties involved, whether they be advertisers, retailers or data brokers. With the cost-of-living crisis presenting the greatest assault on personal finances in generations, and the subsequent market conditions serving businesses with existential challenges, novel and multi-beneficiary solutions are required more than ever. The untapped reserves of product-level consumer data such platforms contain offer businesses a fighting chance against a strained economy and depressed consumer base. Only by fine-tuning their understanding of consumer needs will businesses be able to ensure product success – and avoid the fatal consequences of failure.
Mohsin Rashid is the co-founder of ZIPZERO.
The post For businesses, immunity to the economy comes through the power of itemised data appeared first on UKTN | UK Tech News.
