Retailers' First-Party Data 'Won't Be Good Enough' by 2023

The three main credit bureaus in the U.S.—Equifax, Experian and TransUnion—have long helped lenders determine consumers’ creditworthiness for major purchases like cars or houses. Now, as media networks expand, these agencies' data is being sought out by another source for targeting, growth and verification: retailers. Experts anticipate retail media will remain crowded and complicated in 2023, which means there’s no sign of this trend slowing down in the near term. Carrefour and Publicis Launch Retail Media Venture Jeremy Hlavacek, CCO of Experian Marketing Services, noted that advertisers are reallocating spend from traditional shopper marketing—think in-store promotions—to retail media. This, in turn, has driven demand among both brands and retailers for data from credit reporting agencies. (He declined to name specific clients, saying that only Experian works with “very large retailers” and ecommerce platforms, as well as “large CPG companies.”) Sophisticated targeting First-party data such as email addresses and purchase history certainly have value for advertisers, but they also have limitations. A third-party data provider like Experian, on the other hand, can fill in some of the gaps and enable advertisers to zero in on the precise consumers most likely to purchase a given product. It's good, but it’s not going to be good enough when brands are starting to expect, ‘Listen, I need a little more meat on there'Jeremy Hlavacek, CCO, Experian Marketing Services “If you're doing a keyword search on Best Buy for TVs, you're going to have search ads [for TVs] show up,” said Lester Holze, vp and managing director of retail and CPG at Experian. “That's very contextual. But some of the brands, as they're getting more sophisticated with retail networks, they're asking for that next step.” Let’s say an advertiser like P&G developed a new product for an audience of consumers with a certain household income and who like to play golf. “Retailers don't typically have that,” Holze said. “And so that's what we're hoping to add on to their files so that they can provide that targeting.” ‘A little more meat’ Non-endemic advertisers, or those that do not sell products on a given site, are also pushing retailers to supplement their data. For example, a financial services company that wants to advertise on Walmart.com. Increasingly, it will demand some sort of demographic targeting beyond just the data pulled from the Walmart’s loyalty program. But the same is true of endemic advertisers like, say, Mountain Dew, that might want to reach a specific audience about a new flavor. “There's those top four or five [retail media networks like Amazon and Walmart], and then there's everybody else that's just using the first-party data. And it's good, but it’s not going to be good enough to survive into 2023 [and] 2024 when brands are starting to expect, ‘Listen, I need a little more meat on there. I can work with almost any other publisher. They have some third-party attributes I can kind of model against,’” Holze said. “So that's going to be a need.” Topgolf Alums Take a Swing at Other ‘Sportstainment’ Venues ‘Amazing opportunity for retailers’ While commerce giants like Amazon and Walmart are exceptions to the rule, smaller retailers that were later to the game—which could include CVS, Lowe’s and Family Dollar—will need data to grow their networks beyond an eventual plateau if they are going to continue to win media budgets. That’s according to Mark Rose, senior director of marketing solutions at TransUnion, who added, “[It’s] really about the depth and breadth of their customer data that they can scale into large audience pools and drive reach across not only their sites, but offsite—display, social, CTV—because that's where so many eyeballs and budgets are.” (TransUnion works with retailers as well, but also declined to name customers.) Per Rose, TransUnion helps retailers build audiences around purchase behavior that can be targeted offsite. This will be increasingly important as retailers only have so much onsite inventory to go around and offsite ads can help them scale. “That customer data is really the core value proposition that enables them to build and scale those campaigns,” Rose said. “And if you think about the amount of brand money that is spent on TV, and how TV money is shifting to CTV, OTC… there's an amazing opportunity there, for retailers.” Safety nets and strategies But don’t just take their word for it. Credit reporting agencies specifically can help retailers see customer behavior at a more individual level as opposed to the household level, said Elizabeth Marsten, senior director of strategic marketplace services at performance marketing agency Tinuiti. That’s because a customer who uses a credit card to make a purchase is in all likelihood using their own credit card. And, like sharing Netflix passwords, some households may use the same loyalty card. The additional data from a credit reporting agency would then help that retailer “clarify an individual versus a collective,” as Marsten put it. How Augmented Reality Will Save the Holidays for Brick-and-Mortar Retail What’s more, the data gives retailers a “safety net,” which verifies location data from platforms like Placer.ai, GroundTruth and LiveRamp. “Credit reporting agencies help you essentially make sure that that number [for foot traffic] is actually correct,” Marsten said. “It's not necessarily accurate—just because you went in a store doesn’t mean you bought something.” Finally, with a better understanding of customer demographics, retailers can better strategize how to meet consumer needs. Walmart recently announced it won’t raise prices on holiday meal staples. According to Marsten, Walmart somehow determined that if it takes a slight hit among Thanksgiving shoppers, it’s likely to recoup that loss on “what is traditionally a very large basket size … [as shoppers are] more likely to actually maintain the same basket size or increase because they’re getting more for less.”

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Retailers' First-Party Data 'Won't Be Good Enough' by 2023

But a third party is eager to help grow their media networks

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Lisa Lacy

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