How Independent Retailers Need to Think About Zero and First Party Data

Elliot Djmal
Cover Image for How Independent Retailers Need to Think About Zero and First Party Data

Digital marketing is undergoing an evolution and consumer privacy is becoming more important than ever. The same tools and strategies for collecting customer data to build more effective marketing campaigns no longer work.

As an independent retailer, it’s important to understand what zero and first party data is, how to collect it, and what to do with it, so you can thrive in this new digital marketing reality.

What is zero and first party data?

Zero party data is information provided to your business by customers themselves. Think of their name, email, birthday, phone number etc. First party data is information your business collects from its customers from its own sources, like purchase history, favorite brands, marketing preferences, website activity etc. The information is collected and stored in software that the company uses.

What’s the big deal?

Zero and first party data gives business owners and marketers unique information about their customers. This leads to a better understanding of customers, as well as a relevant and effective way to market to them. Simply put, if you don’t have a customer’s email, or know what their favorite color is, the type marketing campaigns you can run are extremely limited and impersonal.

Okay, so why are we talking about this now?

You may have heard about Apple’s recent privacy changes, including ATT, or App Tracking Transparency. Apple is taking steps to protect consumers’ privacy and prevent companies from tracking you across the internet. This is a great step for consumers, but for businesses? Not so much! Paid ads through Facebook, Instagram, and other social channels are becoming less effective as social platforms become limited in the amount of data they collect. The ROI of previously effective marketing channels is now put into question. And so, businesses are looking into ways to increase the quantity and quality of the data they collect from their own systems. Now is a great time to get into the habit of collecting your own data.

What information should I collect?

The more accurate information you can collect from your customers the better. To start, here is a list of important customer attributes to collect:

Zero party data:

  • Name
  • Email
  • Phone number
  • Birthday
  • Address
  • Family size

First party data:

  • Shopping patterns
  • Marketing preferences
  • Marketing communication history
  • Favorite colors
  • Favorite brands
  • First purchase date
  • Last purchase date
  • Average spend

How should I collect zero party data? My customers don’t like giving it up.

There are tons of ways to collect zero party data. The easiest is at the point of purchase. At that point the customer is already talking to you and giving you information. Teach your cashiers to ask for information in the natural flow of conversation. Don’t ask all at once. For a new customer, ask for their name, email, and phone number. For an existing customer, ask for their address, or birthday. Use it as an opportunity to inform customers of loyalty programs or the perks of sharing their birthday with you, such as receiving a free birthday gift.

Pro tip: Loyalty programs are a great way to collect data.

Picture this scenario: a customer is at the store, ready to pay and the cashier says “Hey! We see you are not part of our loyalty program, do you want to join? You’ll get discounts and rewards for shopping” Customer then says “Yes of course!” Cashier then says “Okay awesome! All we need is a name, phone number and email to get started”.

And just like that, you have an improved customer profile and a new marketing channel through the loyalty program.

How do I collect first party data?

First party data should be collected automatically through the software tools you use. Your POS system or website platform should be capturing and displaying the data for you in an easily understandable dashboard. Each sale that goes through your system should result in many data points, all building up your profile of the customer.

At a glance, you should know that Lisa from New Jersey on average comes to shop every 3 months and her average purchase is 5x larger than the average customers’ purchase. From there, you can set up an automated text if she hasn’t shopped in 2 months to try to increase the chances she comes in more frequently.

Great, I’ve collected this data. Now what should I do with it?

Let’s run through some Q&A:

Question: What communication methods should I use?

Answer: That depends on what you collected! This part is easy.

Collected a phone number? Text or call your customer.

Collected an Email? Email them.

Collected a physical address? Send a postcard!

Question: That was obvious! How do I use first party data to bring shoppers in more frequently?

Answer: The key is to use multiple data sources and connect them together! Here are a few real-world examples:

If you know a customer’s birthday and also have her address, shoot her a text on her birthday with a free gift or special discount. Who doesn’t love gifts on their birthday?

If you know a customer’s favorite dress brand and have her phone number, send the customer a text when you get new items in stock from that brand.

If you sell toys, and you know when a customer’s child’s birthday is coming up, send them an email telling them about about all the new toys in stock!

In conclusion

The power to bring customers back into your business more frequently is in your hands. Customers want to feel important, and the more information you have on a customer, the more you can make that customer feel important with a personalized piece of marketing that you thought of just for them! Pay attention to what pieces of data work with your business and customer, and double down on them! Don’t let Google, Facebook, and other massive ad platforms own your ability to target your customers effectively.

Material makes it easy to collect, manage, and use your data. Our all-in-one retail toolkit enables retailers to manage inventory, websites, payments, customer data, and marketing. And with the marketplace, retailers can access over four million new shoppers.

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