How to make a First Party Data Strategy
This blog was kindly contributed by Teresa Sperti from StudioSpace agency Arktic Fox - a new customer transformation & growth advisory. View their StudioSpace profile here.
First party data strategy has been touted as the antidote for third party cookie deprecation. But despite it being high on the agenda, many brands are still grappling with developing a robust strategy. In our 2023 Digital and Marketing study, developing a first party data strategy ranked as the second highest priority of marketing and digital teams - and early indications from our 2024 study show it is still a pressing issue for many.
Building a robust strategy and executing it effectively is no mean feat. In this piece we explore some of the critical ingredients to developing an effective strategy and highlight how best of breed brands have successfully pivoted their business to become data powered organisations.
1) It all starts with understanding what you want to do with the data and working back from there…
When it comes to data strategy and activation, too much of it is planned and executed in siloes – leading to a first party data set which doesn’t effectively support the brands experience ambition. A robust data strategy starts with the end in mind, giving thought to the experience the brand seeks to deliver and defining what data the brand needs to deliver on it. Whilst this sounds obvious in practice, defining the profile of data the organisation is seeking to build out on the customer on the basis of the end outcome is almost always overlooked and instead the data collected occurs by stealth and additional fields bolted on over time to serve specific needs and use cases.
2) A multi-faceted data capture approach is required
Loyalty programs are often seen and utilised as the silver bullet to collecting data. Whilst they play a critical role to deliver a value exchange between the brand and the consumer to enable data capture, the most successful brands are those that consider the ecosystem at their disposal to capture data and make the process as seamless and painless as possible.
Nike has successfully adopted a multi-faceted strategy to drive data capture and stitched it together to effectively serve its customer and deliver personalised experiences at every turn. When Nike consumers walk into its flagship store in New York City, the company knows who they are, their sports of choice, their shoe size, and colour preferences.
How do they do it? Nike uses its apps - including Nike Training Club, Nike SNEAKRS, and the Nike app - to collect customer data. Nike Training Club and Nike Run Club apps track workout and running statistics and provide users with audio guides during training sessions. Nike apps also sync with apps like Apple Health to pull in data. With many consumers now also buying DTC with Nike, it also provides a rich source for data capture. So valuable has their data set become, it is now utilised to inform stock and merchandising decisions at a local store level, which means its customer data strategy is not only underpinning its online experience - it is influencing the instore experience.
3) The pivot to privacy and consent
There are countless studies both locally and globally that point to the heightened importance of privacy in the minds of consumers. With privacy breaches now a regular feature of daily life, the latest Deloitte privacy report shows that consumers are becoming increasingly frustrated and disillusioned with brands which fail to protect their privacy – demonstrating the link between brand trust and privacy. As a result, consumers are increasingly becoming less likely to want to provide their information to brands, wanting greater transparency and control over what is needed and how it is utilised. This means privacy and consent have really become a vital part of any robust data strategy as opposed to an afterthought. It also means brands need to consider what is right from an ethics point of view (not just what they need to do to be compliant!).
Whilst brands like IKEA were out of the blocks early on the innovation front in the privacy space, enabling consumers to be in the drivers’ seat around use of their data, it is the tech brands that are leading the charge on delivering experiences that balance data capture and utilisation with control, transparency and flexibility for consumers. From Apple mandating consumers to opt in to be tracked, to Meta’s self guided privacy check up tools, consumer expectation in this space will be shaped by the tech giants’ privacy innovation which means brands need to up their game
Decisions around tech can disable strategy execution as much as they can aid in its delivery, which is why having clarity around the longer-term direction is paramount…
4) The tech is not the strategy!
To effectively activate first party data, brands are flocking to a suite of technology to better manage and leverage their data. From CDPs to data clean rooms, there is a host of tools that support and enable effective use of data. BUT these are enablers, they are not the strategy. Decisions around tech can disable strategy execution as much as they can aid in its delivery, which is why having clarity around the longer-term direction is paramount. Equally, tech will play an increasingly important role in management of privacy. The ability to erase a customer’s data from your environment, to provide customers with preferences around the channels and the types of content they want to receive (beyond email and SMS) and share data in a privacy compliant way (as well as other aspects) will all be technology dependant, but strategy must come first.
5) Take off the channel blinders
One of the biggest mistakes we see brands making when it comes to development of a customer data strategy, is developing via a channel lens first approach. Whilst channels are the tools which we utilise to activate the strategy, we need to develop the strategy on the basis of the “moments that matter” across the customer journey that can be enhanced through data as well as on the basis of the “problems customers are seeking to solve” across the customers’ journey. When we do so we are able to create better utility in the experiences we deliver, which in turn can support data capture as we have seen with Nike above, and we can make consumers lives easier through the curation of products and services.
