How one retailer unlocked first-party data to better connect with their customers

Nick Brandts / June 2020

The evolution of marketing is a long, ongoing story. And as things are changing particularly quickly right now, it’s important that we adapt too. Brands have had to change how they engage with consumers, and one word in this continuous journey has been key: data.

“I think every marketer wants to use real-time customer data as much as possible, so they can fully understand their needs and reach them at the right moment,” says Wouter de Rijk, manager marketing and partnerships at fonQ, a Dutch online retail company specialising in home and garden goods. “Our customer data used to be static, updated monthly. That’s limiting when it comes to being relevant to consumers.”

And if fonQ hadn’t made that shift, they would have had a much harder time adapting to the challenges brought by Covid-19. While they saw product demand grow steeply as people spent more time at home, local carriers couldn’t handle the rise in parcels accordingly. “First-party data enabled us to pivot and focus our paid search campaigns on product groups and customer types with a high margin profile, allowing us to get the most out of sales in spite of limiting conditions,” explains De Rijk.

But shifting from static to dynamic data has helped fonQ achieve something else, too. The better the retailer organised its data, the more effectively they could help their customers.

Good but static data

For many businesses, access to valuable data can be limited. Sometimes, this is because the data is ‘static’. That is, it cannot be changed after being recorded. For fonQ, this was hindering their ability to better understand and connect with people who were, or might, be interested in their products.

“We've always used first-party data in our retail marketing,” explains De Rijk. “Which is how we found out that furniture-buying customers return to our site most frequently.” Where data revealed that, of customers who bought small domestic products such as vacuum cleaners, only 10-20% would return, furniture-buyers showed a 60-70% revisit rate.

“It was good data,” continues De Rijk. “But as we only updated it once a month and couldn’t feed it into Google or other marketing channels, it was really static and difficult to use.”

In addition, fonQ’s data strategy focused on products rather than their customers, which made CEO Jeremiah Albinus realise that change was necessary: “It was difficult to build a picture of ‘high retention’ or ‘high probability’ customers. This in turn meant we couldn’t effectively predict customer lifetime value or probability rate. Also, our approach at the time was focused on contribution margin, rather than returning customers.”

New strategy, better customer journeys

Wanting to shift the focus of their strategy to the customer, the data team at fonQ looked to the Google Cloud Platform, which allowed them to bring all business data into one platform, and opened up opportunities to start experimenting.

This new ability to take what was once infrequently updated static data, and turn it into regularly changing, dynamic data, was invaluable to the fonQ team. “It helped us divide our customers into different groups, and reach them differently in real time across our marketing channels,” continued De Rijk. “We now have groups of 'loyalists', and a group of 'potential loyalists’, for instance”.

And the bigger the retailer’s loyalist group gets, the less marketing budget they should have to spend on those customers. “They’re the ones who are familiar with our brand,” De Rijk explains. “They buy frequently and know our products well. That said, we know we aren’t always their first destination, which means we sometimes have to make more of an effort to target those valuable customers.”

There’s long-term value in collaborations

Looking ahead, Albinus is keen to start connecting the dots between the different data silos that are still in place. “The main reason for this is to provide a better customer journey,” he affirms. “Less media waste, higher conversion rates, happier customers.”

Moving from static to dynamic data was a long process for fonQ, but not one they regret. “It wasn't easy,” admits De Rijk. “It took about a year to feed the data into the new tools and systems, but the outcome is worthwhile; our data is now available in real-time across our marketing channels.”

The adjustment has seen a 34% increase in return on ad spend (ROAS) for fonQ’s remarketing campaign, along with a more valuable and flexible data pool.1 “This way of working will change our mindset about how we reach customers from now on,” says De Rijk. Sometimes collaborations can change the way brands approach their marketing strategy, and in an industry that’s ever-changing, there’s certainly long-term value in that.

Key takeaways:

  • Don’t be afraid to invest time into becoming more digitally mature.
  • Using first-party data can help marketers better understand customer needs.
  • Moving from static to dynamic data helps deliver a better customer experience and can increase ROAS.
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