When it comes to luxury retail, digital trends are emerging at an unprecedented rate along with evolving customer behavior, mainly coming from two new generations – Millennials and Generation Z. Over the next five years, 55% of these groups will be the interested shoppers and contribute a significant market share for luxury brands.
This big shift in customer preferences demands a different type of white-glove experience – one that offers omnipresent channels for communication and with individual taste and style. These customer preferences are stored and activated within a Customer Data Platform. CDP luxury retail is a surefire way to get ahead of evolving customer expectations and competition.
What Exactly is CDP?
A Customer Data Platform (CDP) is a robust tool for data-driven marketing. It enables user experience personalization by converging first party and third-party marketing and other forms of data into one place and makes it accessible to other systems.
Put simply, a CDP acts as a central repository, comprising all the customer data of a company. It enables teams to capture, process, and unify data. Also, CDP helps them to use it across various marketing channels, including email, social ads, in-store, on websites and sales campaigns, to name a few.
Customer Data Platforms are becoming a critical element in the marketing arsenal of major luxury retail brands. Sportwear giant Nike, for example, has rolled out new in-store shopping application named the Nike App at Retail. The Nike app stores customer preferences and allows them to shop online or in-store with the preferences and interactions connecting together. The app functions in three ways: Customers can use the app to see if their size is available and reserve it; NikePlus members get the benefits of special offers; customers can scan the barcode to learn more about a product.
Interesting Read: What is reshaping the Retail and Commerce in 2021 and beyond.
Did you know?
A ResearchandMarkets study says, the CDP industry has reported a massive growth in the last few years. Revenue in the industry will take an uptick from $2. billion in 2020 to $10.3 billion by 2025.
This exclusive growth is making CDPs a reliable yet cost-effective marketing technology. A technology that can orchestrate real-time personalized experiences across various channels and help navigate complex privacy regulations.
So, How are CDPs driving growth for Luxury Brands?
Data-driven marketing is definitely the next big transformation. It provides a significant positive impact on top and bottom line of retail luxury businesses when done right. According to Forbes, companies that are equipped with data-driven marketing would be consistently profitable year over year. That’s the precise reason why CDP luxury retail is taking a huge leap to engage, surprise and delight customers and increase operational effectiveness.
Let’s explore how CDPs drive growth from large-scale customer data.
Capture all Customer Data from Different Sources
Digitization has created multiple avenues for luxury retail brands to connect with customers. With CDP, brands can create a unified view into customers mind and requirements. CDPs capture all customer data across a variety of customer touchpoints, and then structure that real-time data at an individual level, into centralized customer profiles. It can gather first-party data from various sources such as websites, mobile applications, CRM systems, payment methods, email, ad campaigns and customer support systems, etc. to better engage with customers.
Seamless Integration with other Platforms Retailers Use
As personalization is taking the center stage, brands are shifting to marketing software and tools built on latest technology. One of the exciting features of a CDP luxury retail is the ability to transfer data to the software/tools that brands use. In simple words, a CDP enables brands to collect all customer data from first party sources. Then, it activates that data in the tools used. In fact, it also supports server-side integration components, helping brands to remove code from applications whenever it is needed. Many companies are adopting CDPs to save millions of dollars as it can quickly integrate and act in order to flourish in the customer experience economy.
Maximize Outcome through Customer Profile Unification
A CDP unifies all interactions that happen across customer touchpoints into trusted profiles. These profiles help marketing teams create personalized messaging and ad campaigns for different channels, and engineering teams implement in-application experiences that matter to customers. This persona feature, which captures everything from customer visits to what actions they have taken, allows brand marketers to build highly customized messaging. Also, it creates more granular targets and enriches profiles to ensure that the team is working on the right data points to personalize marketing campaigns.
One great example is Burberry, a British luxury fashion house, that implemented a digital strategy for boosting sales by nurturing deeper, more personal connections with its customers. The company encourages its loyal customers to participate in various reward programs. The brand created targeted customer profiles which they further used to offer tailored recommendations to their shoppers. This turned out to be a huge success for the luxury brand in terms of repeat customers and sales.
Equip Product Teams to launch ‘The Right Product’
It is vital to have a 360-degree view of the customer data points to drive better insights. With CDP, product teams have complete visibility on how customers are using their products and what value their products are creating. This valuable data helps product teams make the best decisions about product launch. The complete customer view not only allows brands to create personalized and consistent campaigns across different channels but also helps product teams run trials to gauge product adoption among customers.
Guaranteed Data Security and Customer Privacy
In the digital world, customers are concerned about data security breaches and the know how to provide adequate data protection. Data protection protocols (GDPR in the EU and CCPA in California) are now changing how organizations are using customer data. Non-compliance with these regulations can have serious implications for organizations. Therefore, it is crucial for every brand to manage data security across all the systems. Using CDP luxury retail, brands can create safe, compliant-ready lists. This can be done by applying a set of practices to block, hash, or route customer data to comply with the company’s privacy terms and policies.
The Readiness of AI/ML
In the digital realm, companies are collecting and storing large amounts of data, far beyond human capacity to process and understand. AI/ML systems use automated and predictive rules to process and analyze data which further identify patterns and make predictions that are valuable for marketers.
It is important to feed data to AI/ML based systems from a variety of channels to function well. A CDP platform like Adobe Experience Platform works fine in order to collect full customer data from different systems to one location. It then enables systems to identify valued customers, take next best actions, make product recommendations and suggest customers likely to churn or purchase. AI/ML function can help fashion retailers to make better choices, create better campaigns and automate more tasks intelligently.
Marketing technology is constantly improving, and it can be challenging to keep up with what’s next in the unpredictable nature of customer journeys. CDPs are relatively new but it is a crucial part of the tech stack in the age of data-driven marketing. It is here to collect customer data, drive valuable insights and make best decisions.
Such platforms are truly the growth drivers for today’s luxury retail brands. They make the most from your existing infrastructure, future proof brand and keep market regulations and compliance attuned. At Icreon, we’ve worked with reputed clients to make CDPs work for them. Whether it is launching a digital strategy to deliver precise personalized engagements or building modern technology stack that ensures productivity, marketing effectiveness and reporting. Get in touch with us today!