# Investing in a first-party data strategy can save the day for retailers Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-08-29 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Strategies for Retailers to Thrive Amid Rising Inflation Meta Description: Discover how retailers can navigate rising inflation by prioritising customer-centricity and leveraging first-party data for effective marketing strategies. URL: https://financedigest.com/investing-in-a-first-party-data-strategy-can-save-the-day-for-retailershtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1093255792-1736815349153-compressed.jpg) _![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/065-1736815348968-compressed.jpg)_ _By **Stuart Russell,** Chief Strategy Officer of_ [_Planning-inc_](https://www.planning-inc.co.uk/) Inflation in the UK has been rising at [its highest rate](https://www.bbc.com/news/business-61891649) in 40 years. And as a result, retail sales have plunged to [a level](https://www.retailgazette.co.uk/blog/2022/07/uk-retail-sales-fall-to-a-rate-not-seen-since-depths-of-pandemic/) last seen in the worst months of the pandemic. Retailers are pulling their belts a few notches tighter. This often means the prioritisation of business survival over customer-centricity. Online fashion retailer Zalando’s management, for example, made [the difficult decision](https://www.retailgazette.co.uk/blog/2022/08/zalando-cuts/) to reduce its marketing budget this week. Sainsbury’s has cut multiple lines from its ‘price lock’ guarantee range. It’s a ‘batten down the hatches’ [approach for most retailers](https://www.financedigest.com/online-reputation-and-customer-centricity-will-lead-the-way-for-retail-banking-in-this-new-era-of-approachability.html "ONLINE REPUTATION AND CUSTOMER CENTRICITY WILL LEAD THE WAY FOR RETAIL BANKING  IN THIS NEW ERA OF APPROACHABILITY:"). But there is another option. While it may feel counter-intuitive, [learnings from previous recessions](https://hbr.org/2020/08/dont-cut-your-marketing-budget-in-a-recession) actually show that businesses that maintain or increase their marketing spend in times of economic downturn emerge stronger than competitors who opt for cutting costs. With this in mind, [retailers should redirect their spend](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") to focus on customer-centricity, developing deep insights into consumer trends that can be activated as campaigns to drive retention and loyalty. This will allow them to defend their [current market](https://www.financedigest.com/pharmaceutical-contract-packaging-market-current-impact-to-make-big-changes-2020.html "Pharmaceutical Contract Packaging Market Current Impact to Make Big Changes 2020") position, or perhaps come out even stronger. **Good things** [come to those who invest](https://www.financedigest.com/buyers-shun-city-centres-for-country-villas-when-it-comes-to-lifestyle-investment-in-iberia.html "BUYERS SHUN CITY CENTRES FOR COUNTRY VILLAS WHEN IT COMES TO LIFESTYLE INVESTMENT IN IBERIA") We know that [economic uncertainty](https://www.financedigest.com/combatting-economic-uncertainty-in-2023-with-the-payments-sector-2.html "Combatting economic uncertainty in 2023 with the payments sector") has a profound effect on consumer behaviour. For example, 57% of consumers have swapped or plan to swap [their most trusted brands](https://www.marketingweek.com/cost-living-crisis-consumers-response/) by the end of the year, often turning to lower-cost value brands to help mitigate the effects of inflation. While some businesses may see this as a reason to reduce marketing spend (what’s the point of trying influence customer behaviour during a period of such tumult?), this actually [reveals an opportunity for marketers](https://www.financedigest.com/2018-property-investment-market-to-be-harder-but-more-rewarding-experts-reveal.html "2018 property investment market to be “harder but more rewarding,” experts reveal") to capitalise on – especially for brands that can effectively leverage their first-party data. First-party [data – the data owned and collected by a company about its customers](https://www.financedigest.com/should-insurers-buy-data-direct-from-their-customers.html "Should insurers buy data direct from their customers?") – will be the key to understanding how businesses should adapt their strategy to retain existing customers and attract new ones through effective marketing spend. When brands are able to unify and analyse customer data, they can react to [changing customer behaviour with the agility that data](https://www.financedigest.com/stocks-dollar-little-changed-as-inflation-data-sends-mixed-signals.html "Stocks, dollar little changed as inflation data sends mixed signals") laggards can’t. **The** [value of customer-centricity](https://www.financedigest.com/the-value-of-customer-centricity-to-c-suite-financial-strategy.html "The value of customer-centricity to C-Suite financial strategy") Of course, the [key driver behind marketing](https://www.financedigest.com/increasing-demand-for-high-speed-motors-key-driver-of-switched-reluctance-motor-market-finds-tmr.html "Increasing Demand for High-Speed Motors: Key Driver of Switched Reluctance Motor Market, Finds TMR") departments is sales. This [can’t be ignored](https://www.financedigest.com/accountants-cant-afford-to-ignore-making-tax-digital.html "Accountants can’t afford to ignore Making Tax Digital"). However, marketers who prioritise customer-centricity over unnuanced, trade-driven marketing will see bigger, more lasting rewards, but this can only be accomplished through [data and customer](https://www.financedigest.com/manchester-arts-centre-the-lowry-selects-logpoints-siem-technology-to-safeguard-customer-data.html "Manchester arts centre The Lowry selects LogPoint’s SIEM technology to safeguard customer data") insight. One way to operationalise first-party [data and customer insight is to identify behaviours beyond transactions that impact](https://www.financedigest.com/dollar-skids-after-soft-u-s-economic-data-impact-of-opec-cuts-fades.html "Dollar skids after soft U.S. economic data; impact of OPEC+ cuts fades") the business longer-term. By analysing behaviours such as browse data, [social media](https://www.financedigest.com/why-no-event-should-be-planned-without-a-social-media-strategy.html "Why No Event Should Be Planned Without a Social Media Strategy") engagement, foot traffic or abandoned baskets, you’ll be able to identify trends unique to your customer base that will help you segment and personalise your communications moving forward. Through effective targeting and personalisation, [marketers can serve customers the campaigns](https://www.financedigest.com/how-the-latest-ios-update-impacts-your-digital-marketing-campaign.html "How the latest iOS update impacts your digital marketing campaign") that are most relevant to them, which will not only increase your sales, but will also decrease churn. No one wants to be bombarded with generic trade-driven communications, especially during [times of financial uncertainty](https://www.financedigest.com/adapting-payments-to-reassure-consumers-and-safeguard-profitability-during-times-of-uncertainty.html "Adapting payments to reassure consumers and safeguard profitability during times of uncertainty"). By leveraging first-party [data alongside predictive](https://www.financedigest.com/2023-fintech-prediction-secure-and-private-data-usage-is-key.html "2023 FinTech Prediction: Secure and Private Data Usage is Key") analytics and AI, you can be more nuanced about what you show each customer, thereby building healthier customer relationships. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---