How CDPs help the enterprise ecommerce industry thrive
New and seasoned marketers know that “personalization” is not just another trend. It’s become a key component of ecommerce marketing strategies so brands can maintain their competitive edge.
More than half (61%) of executives recently noted that personalizing the customer experience is a high priority for their brand.Executives aren’t claiming its importance for no reason, either – 76% of consumers indicate they are more inclined to purchase from brands that personalize, and these consumers spend 37% more with those brands.
Personalization is here to stay. Don’t just take our word for it, either. Studies have shown personalization can reduce customer acquisition costs by up to 50%, lift revenue by 5-15%, and increase marketing ROI by 10-30%.
While personalization offers quantifiable benefits, enterprise ecommerce businesses still struggle to effectively tailor customer journeys to drive more revenue.
This article explores these challenges and how Customer Data Platforms (CDPs) like Simon Data can help enterprise ecommerce businesses overcome these obstacles by unlocking the full potential of customer data for a personalized shopping experience.
The challenges of personalization for ecommerce companies
As personalization continues to prove its value, it also presents challenges for enterprise ecommerce businesses. These challenges can lead to missed opportunities for increased customer engagement and loyalty, ultimately affecting revenue.
In a 2024 report by Deloitte, only 43% of surveyed consumers acknowledged that their online shopping experience was personalized, contrasting with 61% of brands that reported personalizing their marketing campaigns.
Remember: more than 76% of consumers say they’re more likely to purchase from brands that personalize. So why does this disparity exist?
This disconnect between ecommerce businesses and their consumers often stems from:
Data silos: For ecommerce businesses, data often resides in various systems. For instance, customer data can be found scattered across CRM, marketing automation, and analytics tools. As a result, marketing teams struggle to analyze and fully understand customer behavior, preferences, and purchase history.
Fragmented customer profiles: Customer data can also be inconsistent and incomplete. This leads to inaccurate profiles that hinder personalization efforts. Businesses cannot deliver targeted content, relevant product recommendations, and timely promotions without accurate and holistic data.
Lack of actionable Insights: Even if customer data was not siloed and complete, without the ability to translate this information into meaningful actions, its value diminishes. This can result in generic and impersonal interactions that fail to resonate with the customer, impacting conversion rates and customer loyalty.
Data governance & security: Enterprise businesses must navigate strict data governance and security requirements.
Compliance with regulations such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) is essential to protecting customer data and maintaining trust.
These regulations impose guidelines on customer data collection, storage, processing, and sharing.
These unfortunate but common scenarios can impact any ecommerce brand’s ability to create cohesive, personalized customer experiences.
CDPs address these challenges by ingesting data from scattered sources and marrying it into a customer 360. This allows ecommerce marketers to take action on their customer data and identify the data gaps needed for better personalization.
Additionally, most CDPs, including Simon Data, prioritize data governance and security requirements so enterprise marketing teams can rest easy knowing their customer data is protected.
How CDPs help enterprise ecommerce brands thrive
CDPs address common challenges and can contribute to the success of ecommerce brands. A CDP can improve conversion rates, drive increased average order value, and even foster better customer retention and loyalty. Simply put, when used effectively, a CDP can help your ecommerce brand flourish.
This is especially true for enterprise ecommerce businesses as CDPs help larger organizations with:
- Managing complex data ecosystems that include numerous data sources and multiple integrations.
- Achieving a customer 360 view by consolidating disparate customer data. This creates a single customer profile that provides detailed browsing behavior and purchase history.
- Enhancing segmentation capabilities so the marketing team can leverage rich customer data to create granular audiences based on demographics, behavior, and purchase history.
- Personalization at scale, such as custom product recommendations, targeted marketing campaigns, and dynamic content delivery across all engagement.
CDPs empower ecommerce marketing teams to orchestrate customer experiences as well. A tool like this helps ecommerce brands engage customers throughout the journey with precision and intent – creating a personalized online shopping experience across channels (website, email, mobile app, etc.). This ensures consistency and relevance across each customer touchpoint.
Let's break down the customer journey into three phases: acquisition, engagement, and retention.
First, ecommerce brands need to acquire new customers. This is done through brand awareness and engaging with potential customers. Some CDPs, like Simon, can integrate with social media or programmatic ad vendors, such as The Trade Desk, for brands to use first-party data.
Creating a lookalike audience of your most valuable customers will potentially bring in additional high-value customers, for example.
As customers start researching and evaluating the product/service, ecommerce brands want to engage with customers.
Enhancing the customer's pre-purchase experience might involve targeted digital ads, product suggestions based on browsing history, or sending timely messages in response to customer behavior (like abandoned cart reminders) – all of which a CDP can do.
Personalization continues beyond the initial purchase. During the retention phase, ecommerce brands pivot towards fostering customer loyalty, which improves Customer Lifetime Value (CTLV).
CDPs provide essential capabilities for brands to implement strategies aimed at increasing repeat purchases, upselling or cross-selling related products, establishing loyalty programs, and maintaining customer satisfaction.
A customer story: RCI
Resort Condominium International, a Simon Data customer, saw notable results with their new website personalization strategy. Personalized website content increased bookings from their “not likely to book” segments by 4.5% and generated $13MM in revenue.
While RCI only reported on web content personalization, imagine what the results could be from personalizing across all channels across all customer touchpoints. With the right set up and integrations, CDPs can optimally personalize a seamless omnichannel experience.
Conclusion
At Simon, I’ve been hearing from customers about how difficult it is for enterprise marketers to access, secure, and activate the gold mine of customer data they already have to meet consumers’ demands for personalization.
But this is just the beginning. According to a 2022 study by IDC, the volume of data (created, captured, replicated, and consumed) in the world is expected to double by 2026. That’s an estimated 100,000 exabytes (EB) worth of data!
Consumers already want relevant and timely experiences. With the increasing amount of data, enterprise ecommerce brands must maximize its use to drive personalized experiences.
A CDP offers the essential functionalities for ecommerce marketing teams to fully leverage customer data by streamlining data management and providing robust orchestration capabilities.
CDPs also enable enterprise ecommerce businesses to effectively utilize data-driven personalization through single customer views.
Don’t overlook the vast amount of customer data currently available and the unfathomable amounts to come. Learn how to take your ecommerce business to the next level by fully harnessing the potential of your customer data.
