How retailers like Walmart are winning with data
Retailers today collect vast amounts of first-party data, but that alone does not provide a complete picture of the customer. More context is needed and third-party data is helping fill in the gaps.
According to a session at the National Retail Federation’s (NRF) Retail’s Big Show in New York this week, there’s something of a “third-party data revolution” taking place and retailers like Walmart are generating a huge amount of value and insights from it.
“When we think about walking in the shoes of the consumer, that guides us. Understanding how they shop with Walmart is a big part of their life, but it’s not necessarily the whole of who they are. So, we are a part of it, what about the rest of it? What about that broader context? It’s really important that we think about what’s happening in that macro-environment. What are they thinking? What are they feeling, in addition to what it is that they’re doing when they’re with us? What are they doing in general? And that helps us understand what’s happening at large,” said Jennifer Acerra, vice-president customer insights and strategy at Walmart.
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As the dominant retailer in the United States, Walmart boasts some impressive numbers: 90% of the country’s population (of nearly 335 million) shopped at Walmart in the last 12 months with 65% shopping there in the last month, providing the company with enormous amounts of customer data.
“First-party data is very powerful, we rely on it quite a bit, especially as we’re leaning in and making big investments, because there’s a lot more certainty in what you’re seeing, but it’s hard to rely on it alone,” said Acerra. “The other pieces that are coming in, whether it’s first-party custom work or third-party data that you layer on top of it really does tell you the complete story.” Add to that the expertise of the people close to the business, then it becomes powerful, she said, and “a source of competitive advantage that drives value for the company.”
First-party data without third-party data “is tricky” said Acerra, adding if making investment decisions, you must make sure you’re covering your bases and looking at it holistically. “You can’t just look at one piece [of data] that’s where you might make an assumption.”
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When asked what advice she had for other retailers when it comes to using data, Acerra said that retailers must be rigorous when checking the data to ensure it is the right quality—this is crucial, adding that the “risk levels are high” today with the business decisions being made based on that data.
Partnerships, too, are important. Recognizing that retailers have a lot of data at their disposal at the first-party level so look for partners that can provide the third-party data that can be used to compliment your data.
“Data is the lifeblood,” said Acerra. “It’s knowledge. Knowledge is power, but in order for it to turn into insights, we need that layer of context. We need to better understand what’s happening with the business and what’s needed so that we can make certain that it’s adding value.”
