Digital transformation is a process of leveraging advanced and innovative technologies in the retail sector to streamline operations and enhance the overall user experience. With the emergence of new technologies such as big data and artificial intelligence, retail businesses are maintaining a robust tech-driven system for managing their operations widely.
However, this transformation also leveraged new challenges such as inconsistent personalised offerings, the possibility of fragmented data, and ineffective consumer support. Resolving these problems requires optimised data systems and needs to develop a consumer-centric approach to address the needs of new tech-driven consumers.
The innovation of CDPs offered a large change in the retail sector: businesses are preferring data-orientated strategies more to remain competitive in the market. These consumer data platforms help companies in gathering consumer data from different kinds of sources, which helps in innovating more defined and targeted strategies.
Moreover, the retail industry will continue to evolve in this digital era to gain more consumer satisfaction and a user base.
This blog aims to analyse how consumer data platforms are empowering the digital transformation of the retail industry.
What is a Customer Data Platform (CDP)?
A consumer data platform is a type of technological innovation that offers brands and companies in gathering consumer data through various sources to develop a desired consumer profile.
These applications consist of a user database and acts as a management partner for cross-channel marketing campaigns by exploring consumer data in real-time, which helps them in curating a personalised experience for the consumers.
Difference from Other Platforms -
| Type | Main aim | Data used | Key uses |
| CDP | Gathers and unifies consumer data for marketing strategies | Primary sources, real-time data capturing | Segmentation, consumer insights and automation. |
| CRM | Consumer relationships and interactions. | First party consumer data | Service management and sales tracking |
| DMP | Gathers anonymous user data | Anonymized data through secondary sources. | Audience modelling and Ad targeting. |
How CDP Builds a Single Customer View –
A single consumer view, also referred to as unified consumer description, is a process of collecting all the data in relevant to a single client to maintain his/her unified data.
Organisations can develop a single consumer view as a descriptive picture on a CPD platform. The consumer data application offers more features, such as centralization of all user information and making it available across departments.
For instance, a CDP platform can extract data from various sources like social media platforms, CRM systems, and e-commerce platforms to create a unified consumer profile.
Why CDP Matters in Retail Today
Several retail businesses are facing significant challenges in utilising consumer data in the best way possible. Additionally, the data is segmented across various channels in both offline and online manners, which offers a fragmented view of the data.
As the retail industry grows, retailers may find it harder to manage their existing consumer data in their data management systems or CRM softwares as they lack important functionality and support in scaling on the basis of needs.
To provide effective solutions for these issues, retailers are shifting to consumer data platforms. By gathering information from all the data sources available CDP offers fully analysed real-time consumer profiles, which helps businesses in achieving competitiveness in the market.
Why Legacy Systems Cannot Meet these Demands -
Legacy platforms are not able to fulfill these new demands as they were developed in the context with the batch-based data examination form and were built to run in a simple business ecosystem.
- Incompatible data models - Legacy data gathering systems were designed to store information in different formats, which cannot be standardised with new advanced tools. This can result in poor data collection and failure in maintaining a single record system.
- Lack of advanced data analytics - Legacy platforms were not built in with consideration of capturing real-time data, hence lacks features like predictive analysis. This hampers the growth and ability of the organisation to extract data from various sources.
- Difficulty in governance - Legacy systems were not developed to handle rapidly transforming data privacy guidelines like CCPA and GDPR. These platforms may not offer functions like data access requests, which can be very risky for businesses.
The Need for CDPs -
Several retailers do not have the best data collection and analyzation tools, and their user data was segmented into various platforms, both offline and online. They have implemented certain CRM tools and data management applications, but they sometimes lack the important information that can be very crucial for the company to scale its operations.
Due to this, the retailers have begun to shift to use consumer data platforms as it gather and unifies data across different channels and mechanisms.
Our blog: https://msmcoretech.com/blogs/cdp-in-retail-sector
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