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Direct to Consumer

Building a DTC Data Foundation Starts — and Ends — With Reciprocal Value

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Danica KonetskiDanica Konetski is the Industry Principal, Consumer, at Treasure Data.

Building a data foundation for successful direct-to-consumer commerce hinges upon engaging consumers in new ways and developing trust. For consumer goods companies, this can be challenging given legacy operating models, systems, processes, and ways of thinking.

We checked in with Danica Konetski, Consumer Industry Principal at Treasure Data, for insight into how CGs can create strong consumer data foundations and empower business models.

CGT: How do CGs scale their DTC businesses and build their trust among consumers who are used to buying their products more in a business-to-consumer shopping experience?

A CG in the early stages of building their DTC business and consumer data can begin by boosting visibility and awareness with a robust social media presence inclusive of Facebook, Instagram, and Twitter.  

Of course, a brand can strengthen the likelihood of purchase with products and services that provide unique solutions—addressing consumer pain points with online exclusive products and product bundles. These efforts coupled with visual and immersive content strengthen engagement. 

The metaverse is also creating a new way for brands to connect with consumers, build their online presence, and increase sales.

CGT: How can brands best incentivize consumers to share personal information beyond a simple loyalty program?

Collecting and managing first-party data is an essential, growing competency across industries, but in the CPG vertical, there are typically unique complications:

  • More aggregated, and less personal, consumer data
  • An over reliance on third-party cookie data, and
  • Surrendering of the ownership of consumer engagement to third parties
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This is where the concept of reciprocal value is useful.

Reciprocal value refers to the mutual exchange of value between consumers and brands. 

While brands and companies continue to progress their digital capabilities, consumers have experienced their own digital transformation.  

As a result, consumers have an increased sense of agency, taking control of their interactions with brands to curate and co-create their own experiences while ensuring their personal information (PII) is protected and treated with respect.  Even so, the vast majority state they will provide PII if it results in a better experience and about ¾ find living profiles OK if used to create value. 

Simply put, CPGs need first-party data, which is tricky to get. But, if you stay grounded in consumer centricity, and ask consumers to share their personal identifiable information with you, they will more likely do so if they receive better experiences in return. 

CGT: Some consumers are cautious about sharing their personal information digitally. How do businesses convince consumers that their apps are safe and that their personal information is protected?

Of course, it is important to be compliant with all data privacy and regulatory requirements. Additionally, there is an important long-term effect of simple data hygiene that protects us from clumsy use of consumer data, which erodes confidence over time. 

By data hygiene, I mean thoughtful filters that prevent brands from sending ads to people who have already bought the product, or from placing retargeting ads out of context (like re-targeting efforts for women’s leisure wear that pops up when shopping for a Father’s Day gift).

Correct spelling of names, data logic, and universal IDs are also important considerations when properly managing consumer data and can be accomplished through both probabilistic and deterministic approaches.

And, it is important to always be mindful of activating in ways that are helpful to the consumer, rather than annoying or intrusive. 

CGT: What are the challenges businesses face with managing inventory when deploying a DTC sales model?

Managing inventory and demand sensing is a critical foundation to be able to best orchestrate the entire supply chain in the most effective and efficient way. Increasing consumer metrics into the demand sensing algorithm is key to having the right inventory at the right place at the right time.

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CGT: What technologies should brands be exploring as they look to take their DTC efforts from run-of-the-mill to market-leading?

As brands refocus on the consumer as their North Star, we see more business operations putting the consumer at the center of their technology and implementing a thoughtful data strategy to drive a robust consumer data foundation.

Businesses are adding Customer Data Platforms (CDPs) to their tech stacks to facilitate connected experiences across all consumer interactions. CDPs build robust consumer profiles from all consumer data (owned, paid, and earned) across all part of the organization (marketing, sales, service, inventory, etc.).  

With predictive analytics and machine learning, data integrations, and journey orchestration capabilities, CDPs enable businesses to get the most value from consumer data. The data can be mapped into other data forms, including product metadata, inventory, and price.  This leads to a clear understanding of how to acquire new customers and retain existing customers with smart product recommendations and targeted promotions. 

Centralizing this data with strong governance and use case plans allow CPGs to own their own data and insights and deliver best-in-class consumer experiences that drive revenue growth and LTV, improve return on marketing and advertising investment, and inform decision makers with the insights they need to set direction and activations across all aspects of their business.

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