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Take a step outside: the value of third-party customer data

Suzanne Larabie

The 360-degree customer view is the Holy Grail of today’s retail industry. Consumers are increasingly demanding personalized, seamless experiences, and organizations need to act promptly to stay ahead of these expectations.

Customers are more willing than ever before to share their data if they are confident it will enhance their experience.

The foundation of the experience economy

Data – more specifically, the 360-degree customer view – is the foundation for developing the ideal customer experience and convenience engagement. Information allows organizations to personalize the shopping journey for each customer, which in turn creates positive experiences and builds loyalty.

Essentially, this all comes down to customer analytics. According to Forrester’s Brandon Purcell, “customer analytics uses customer data and analytic insight to design customer-focused programs that win, serve, and retain customers.”

The challenge, though, is collecting data from each and every touchpoint to create a relevant, detailed portrait of each customer. While this is a massive action item in itself, companies often need to look beyond their walls and outside of their own experiences to gain the nuanced insight required to effectively personalize each customer’s experience.

The risks and rewards of third-party data

In order to augment proprietary customer data, merchants will invest in third-party data to learn more about the customers and markets they serve. Spending habits, personality traits, and more combine to add depth, nuance, and context to data gathered from brand interactions.

People don’t only engage with one brand on their shopping journey, so solid third-party data can be a real game changer for personalization efforts. Furthermore, this information can even help businesses that are lagging the industry in establishing their own internal data strategies and capabilities.

At the same time, however, cost and data validity are important factors in whether third-party data is worth it. If you can’t trust the data, or if it costs more to acquire than you’ll get out of it, is it really worth it? These are important questions companies must answer.

Collaboration: the best way forward

The situation around the utility of third-party data is a complex puzzle. On one hand, it can add invaluable context to your personalization efforts. On the other, it can potentially introduce more problems than solutions.

As a leading innovator and solution provider for the industry, Capgemini has taken this challenge head on. Through the creation of the groundbreaking Capgemini Data and Analytics Consortium, we are bringing like-minded retailers spanning a wide array of verticals together to share their data, learn from other leaders, and add cutting-edge context to their customer experience.

I will explore this context in part two of this blog series.