The retail industry was one of the hardest hit during the pandemic and recovery has been a rollercoaster. Consumer shopping behaviors have changed forever, with the majority of retail interactions now happening online.

Despite these changes, the demand is there. Recent spending data from Mastercard indicates that consumer spending was up 7.6 percent during the holidays. As we progress through 2023, how can retailers adapt to meet new and existing customers where they are and capitalize on increasing demand?

Exceptional online experiences have now become well established as the norm. While most retailers have developed user-friendly online storefronts, seamless transactions, and even satisfying digital customer service options, many e-commerce experiences are still lacking the humanity that can elevate an in-store shopping experience. What’s worse, the digital marketing techniques used by retailers can still come across as creepy and invasive, driving potential customers away rather than keeping them engaged. In 2023, retail marketers cannot continue to rely on the status quo of impersonal methods of third-party data collection. Their online interactions need to have a give-and-take approach, with a focus on collecting meaningful feedback directly from customers in order to deliver more personalized experiences and drive brand loyalty.

What is Zero-Party Data?

Defined by Forrester, zero-party data is data that a customer “intentionally and proactively shares with a brand,” unlike third-party data which is data that is collected from external sources, often without knowledge or consent from the customer. Without traditional in-store interactions, retailers may feel disconnected from their online customers, and customers may feel the same way.

By collecting zero-party data directly from the customer in the form of visually appealing surveys, quizzes, or other methods, retail marketers can secure the data and information they need about customers to build more meaningful relationships, even in a digital world. People want to be treated like people by the brands they know and love across every touchpoint whether it be an in-store purchase, an online purchase, or an order confirmation email, and zero-party data enables retailers to do just that.

Give-and-Take: The Key to Securing Valuable Data

Picture this: in-store interactions as a real life data collection experience. In-store collection of third-party data might look like a manager observing which products a customer picks up and  tries on, making assumptions about the customer’s likes and dislikes based on this observance. Whereas in-store collection of zero-party data might look like the manager walking the sales floor and conversing with customers about the products they are shopping for, and recommending items based on their preferences. By simply observing the customer, the manager is not creating a personal relationship with the customer. Through the physical interaction and pleasant conversation, the manager is able to build brand loyalty with the customer by providing helpful suggestions, while also collecting valuable information about their spending habits.

Retailers can also intrigue customers and begin to build a relationship by creating an inviting and visually appealing storefront. Customers are less likely to walk into a store that doesn’t look appealing from the outside. The same goes for online interactions or surveys. For example, if a survey is visually appealing and easy to navigate, customers are more likely to complete it, and the data shared will be more valuable since it is coming directly from the customer.

Marketers have long relied on third-party data, but getting true, first-hand data comes from a give-and-take experience with customers. There needs to be some sort of value provided in return to the customer.

Leveraging Data to Improve the Customer Experience Despite Outside Forces

There will always be outside forces impacting the retail experience such as the pandemic, supply chain disruptions, and ever-evolving customer preferences to name a few. But despite these challenges, retailers and retail marketers must do their due diligence to remain agile and successful in the event of circumstances beyond their control. Good data that comes directly from the customer can help safeguard business operations. With zero-party data indicating exactly what customers are interested in and what they plan to spend their money on, retailers can shield their business operations from external factors.

While the retail industry is still recovering from the impact of the pandemic on sales and changes in consumer behavior, with the right customer data and personalized digital experiences, businesses can capitalize on consumer demand. Combined with a positive and personable online presence, actionable zero-party data will be the key to success in 2023 as retailers continue to connect with customers digitally.