Demystifying Retail Data Monetisation
How retailers can solve the data monetisation puzzle.
The impact of evolving consumer behaviour and shopping habits coupled with the transformational impact of technology can be seen in the changing face of our retail landscape. Data is truly at the centre of this transformation as retailers look to build an ability to have a uniform & real-time decision-making capability and the agility to respond to market trends. Today’s modern retailers are leveraging not only customer data but looking at the intersections of customer data with product data, store data and more to make meaningful AI/ML-driven insights into all aspects of the business.
But it is not just about having visibility or improving operational efficiencies, it is also about leveraging the data to work together with your brands/partners, building your collaboration networks and co-creating to provide a win-win for all.
Well, the good news is that retailers can achieve this by having a sound data monetisation strategy. However, the interpretation of data monetisation typically gets a very varied response. For most, data monetisation simply is being able to sell your data for monetary benefits. Well, actually, it goes much beyond that!
Data Monetisation is a multi-layered process.
Data monetisation is a multi-layered process and data activation for generating incremental revenues is as much internal as it is external. So far, we find the majority of the retailers still focused on using transactional & customer data to do business intelligence reporting of predefined KPIs. The primary objective here is to get visibility to be able to make informed decisions and improve operational efficiencies.
However, with the goal of monetizing their data in mind, retailers are looking beyond the obvious to explore how this information can be used to optimize their business processes and create incremental revenue streams by sharing this information with external stakeholders. Let's explore this a bit more to understand the path a retailer can take to build a fully integrated data monetisation platform supporting a customer-first strategy.
3 Paths to Retail Data Monetisation
Defining the outcome is key to a successful data monetisation strategy. Retailers need to have clarity on their objectives and the expected outcomes. Based on this, there could potentially be 3 paths to a data monetisation strategy.
By building a System of Insight
The first and the most foundational element of data monetisation strategy is to build your ‘System of Insight’- a self-service platform where suppliers extract valuable insights, KPIs, and competitor comparisons. The inclusion of 3rd party data can also be an added value.
By setting up a Retail Media Networks
Second, and very popular these days, is the option to set up your in-house retail media platform- a self-service advertising platform allowing suppliers to buy and measure the effectiveness of media campaigns using online and offline data. This allows a retailer to monetize their 1P data across their owned channels and offsite formats by enabling brands to reach consumers across the shopping journey and validate sales & performance impact via closed-loop measurement.
By establishing a Clean Room Ecosystem
Third and the final piece of this puzzle comes together with setting up a Clean Room ecosystem- a data & information exchange which provides a space for 1P and 3P data to connect, opening the door for valuable insights, AI/ML, and co-created projects. Technology platforms like Google Cloud’s Analytics Hub can enable retailers to securely exchange data and analytics assets within or outside their organization.
Let's look at a few examples where we see retailers adopting the above-mentioned pathways to monetise their data. A great example would be Walmart which is focused on building a single source of truth (a system of insight) for their entire business- a single data platform for transactional and operational data to deliver breakthrough customer experiences at scale.
Another retailer- Carrefour has partnered with Google cloud to build their data monetisation platform in-house resulting in an uplift in their marketing performance, demand forecasting and assortment planning. In addition, they have also set up Carrefour Links, a retail media & performance platform which enables data-driven solutions ( customer analysis, campaign performance monitoring, marketing ROI etc) for brands to help them engage with their customers more effectively. This is a perfect case study on how a retailer can monetize their 1st party data to not only improve their operational efficiencies but to also collaborate effectively with their partners.
Last but not least, SoundCommerce is a wonderful example of retailers that can build a clean room ecosystem (using platforms like Google Cloud’s Analytics Hub) whereby they can safely and efficiently share data with brands further accelerating their pace of innovation.
Build an integrated data monetisation platform
The journey towards becoming adept at leveraging your data to build your collaborative networks and drive data monetisation is definitely not an easy one. However, I am pleased to inform you that the biggest challenge is not technology. The absence of a strategic vision amongst executive teams coupled with a lack of awareness of the possibilities around data monetisation is often the leading challenge. There is then of course the privacy concern and the issue of multiple data silos within the organization which makes the execution difficult. Talent and culture also play a big part in making this dream a reality.
Partners like Google Cloud can play a big role in developing data monetising strategies by enabling technologies to power privacy-safe data experiences, API monetisation, data ingestion tools & repositories, semantic layers and visualization. In addition, integration of public data sets along with your own 1st party data made available via fully compliant private exchanges can accelerate your path to data monetisation.
Executing your data monetisation strategy will no doubt require investments in time, money and people. But one thing is clear, having an integrated data monetisation platform will unlock a tremendous competitive advantage for your business- generating incremental revenue, building powerful collaboration networks and unlocking your ability to offer a superior shopping experience. This is an opportunity you can't afford to miss.