Business transformation. Omni-channel acceleration. A single customer view. None of these ambitions is new, but for many organizations, they remained long-term, hypothetical aspirations that were quickly de-prioritized in favor of short-term growth and higher share prices.
Then everything changed.
The economic shockwaves and fundamental shifts in consumer behavior caused by the COVID-19 pandemic have brought new urgency to transformation mandates and growth-focused initiatives that not only create new revenue opportunities and improve customer interaction and engagement, but also open up new avenues for collecting valuable first-party customer data that can be wielded as a competitive advantage when unified and acted on quickly. While these initiatives will vary significantly by industry and other business-specific context, here’s a look at five common themes that will drive customer engagement and value-based growth in 2021 and beyond.
1. Direct-to-Consumer Diversification
The coronavirus kicked online purchasing into high gear, with potentially lasting impact on brick-and-mortar businesses. In fact, consumer studies indicate that many customers who migrated to online shopping due to COVID-19 will remain online in the future.
While this trend pre-dates 2020, for CPG brands and other companies that historically sell their goods through retailers, the pressure just kicked up a notch to prioritize direct-to-consumer (DTC) relationships if they want to maintain relevance and thrive in 2021 and beyond. Take OREO, for example, which recently rolled out its OREOiD feature that lets fans design their own OREO cookies. This DTC diversification will not only create additional revenue streams, but will also help these companies improve their ability to attract, convert, and retain customers through the collection and use of first-party data, which has historically been difficult to access via traditional retailers and ecommerce marketplaces.
Related Article: What DTC Companies Know About Delivering Great Customer Experiences
2. Customer Lifecycle Marketing
Research shows that most consumers are more willing to give companies their data in exchange for the promise of quality personalized experiences. For this new marketplace to succeed, however, it’s essential that companies deliver on that promise. That means moving away from outbound, channel-centric campaigns that attempt to force customers down a preordained path.
In 2021, look for more companies to use what they know about a person (e.g., transaction history, behavioral events, marketing consent preferences, etc.) to orchestrate targeted, personalized interactions based on where each individual customer or prospect is on their unique journey.
3. Digital Products and Experiences
As companies have become more digitally mature, there’s been a gradual shift in thinking from how they can use digital to sell more products and services, to how they can use technology to reimagine the way they create value for customers and drive revenue growth.
Take AMC Theaters, for instance, which recently launched a video on-demand service to reach movie lovers at home while bolstering the chain’s main business venture: theater attendance. In the coming year, expect to see more companies roll out new digital products and experiences that enhance their ability to collect first-party data straight from their visitors, app users, and shoppers, and utilize that consented data to increase the relevance of their interactions with customers.
Related Article: We're All Stuck in the Privacy and Brand Safety Tangle
4. Audience Monetization
Calls for GDPR-like privacy regulation in the US, paired with ongoing Google and Apple announcements that further deprecate the use of third-party cookies have sparked increasing interest in first-party data offerings. Pharmacy chain CVS, for instance, recently rolled out a data monetization program that gives CPG companies access to its privacy compliant, first-party data so they can better target and engage individuals across the web, on the CVS website, and in physical retail stores. Such programs create a win-win situation for data owners, advertisers and customers alike: the added line of revenue for data owners simultaneously improves audience targeting for advertisers and generates more value for customers in the form of a more personalized experience.
In 2021, look for companies across industries — from media and publishing to retail and financial services — to look for new, innovative ways to leverage their first-party data assets to diversify their revenue portfolio.
5. Analytics and Data Science Democratization
Marketing, ecommerce and digital product teams have traditionally had to wait on over-burdened internal IT departments or costly external agencies to create and deliver custom segments and customer scores that are days or weeks old by the time they are used — effectively neutralizing efforts by these teams to deliver bespoke experiences across all touchpoints. In the coming year, look for more transformation-minded organizations to invest in technology, like a customer data platform, that not only unifies first-party customer data at an individual level, but equally important, gives that unified profile data back to business technology users in marketing, ecommerce, etc. in a format they can use to improve how they engage with customers and support a fast-moving, end-to-end customer experience.
In a year marred by COVID-19 and economic uncertainty, business leaders everywhere have been reminded of the need to have teams and technologies in place that allow for agile transformation and growth. Consumer behaviors may never fully return to what they once were, and the companies that are able to quickly adapt their strategies and business models to double down on customer interaction and engagement will be far more ready to confront the challenges — and opportunities — of 2021 and beyond.
Related Article: Data Democratization Is Key for Businesses Navigating COVID-19
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