Use zero-party data to your advantage.

3 Ways Retailers Can Gather, Harness and Effectively Use Zero-Party Data

This piece originally appeared as a TotalRetail post.

Much of the conversation about how marketers can collect, harness and effectively use zero-party data focuses on brands, which struggle to gather it, or information consumers proactively provide, because businesses rarely maintain direct relationships with customers at scale.

Retailers face an entirely different challenge: an abundance of consumer touchpoints and a massive amount of data at their fingertips. So how can they maximize the value of the information at their disposal?

They can effectively gather, harness and use zero-party data to drive value by one, building retail media networks, two, strengthening partnerships with brands and, three, offering customers exclusive deals. Here’s how.

Building Retail Media Networks

Retail media is booming. eMarketer predicts that by next year the category will exceed $50 billion and account for 20 percent of digital ad spend. has built such a large retail media business that it’s now digital advertising’s third biggest player behind Google and Meta. Other major retailers like Walmart, Lowe’s, and Target have also been beefing up their media businesses.

Why the surge in retail media, and why now?

Retailers maintain large supplies of first- and zero-party data (i.e., information directly sourced from their customers). Brands, especially CPGs with massive businesses but little direct interaction with customers, will pay handsomely to understand which consumers are already in the market for their products as well as which may be, and target both groups.

Plus, unlike inventory from, say, The New York Times, retail media offers the chance for brands to engage with customers at the point of purchase, whether online or in-store. When it comes to driving bottom-of-funnel conversions, there’s nothing like serving someone an ad for Tide products when they’re browsing detergent online or walking down the household goods aisle.

For retailers, the media business offers the opportunity to generate a new and considerable revenue stream driven by data. That can be especially valuable in times like the present when macro forces such as inflation are eroding margins. The key for retailers is to ensure that any data they share has been collected and is being shared with consumer knowledge or consent. Otherwise, it wouldn’t make good on the promise of consent that undergirds zero-party data.

Strengthening Partnerships With Brands

Customer data isn’t just fuel for advertising. It helps organizations understand who their customers are, what they do and don’t like about specific products, when and how often they tend to buy, and much more to optimize products, not just market to them. Therefore, retailers can generate a great deal of value for their brand partners by asking their customers for information beyond what’s required for data-driven advertising.

For the retailer, this means building more robust conversations with customers to transform themselves into not just media businesses but customer intelligence partners. By polling their customers or asking them for permission to share purchase and visitation data in exchange for values like discounts and loyalty program experiences, retailers can step into the void that will soon be left by third-party data brokers, providing brands ethically sourced consumer intelligence.

From this new data sharing equation, retailers get a new revenue stream and the opportunity to differentiate themselves from competitors by becoming the organization with which brands most want to do business. Brands get valuable insights on their customers and prospective customers at a time when data is drying up. Customers get to choose whether and to whom they provide any of this data, and if they do choose to provide it, they get targeted, transparent value from the retailer or brand.

Offering Customers Exclusive Deals

The final, and ultimately most important, tenet of the retailer zero-party data business is providing value to customers to earn their data in the first place. The very idea of zero-party data is that it’s information customers proactively and knowingly provide to businesses. So, covertly observing behavior won’t cut it. Retailers need to make a transparent value proposition and persuade customers that the exchange is worth it.

One form of value retailers can provide customers using zero-party data is exclusive deals. This doesn’t just mean discounts for customers who consent to identifying themselves by registering for a retailer’s loyalty program. Retailers can go one step further by targeting deals to consumers based on the identity information they provide. For example, an apparel retailer might provide exclusive deals to teens and young adults around the time school or college begins. A brand that wants to honor first responders might target offers specifically to police officers, firefighters and other emergency personnel.

With identity-based deals, retailers transcend the basic equation of data for discounts. They offer customers value based specifically on who the customer is. This isn’t just a cheaper bill for customers; it makes them feel like the brand is not only asking for their loyalty, but also extending loyalty to them, recognizing their individual value and rewarding them for it. That’s how long-term retailer-customer bonds are forged.

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