The retail and consumer goods sectors are constantly evolving, shaped by technological advancements, shifting consumer behaviors, and global economic trends. As we look ahead to 2024, several key trends are expected to redefine the landscape, offering both challenges and opportunities for businesses.
Here’s a look at those trends and the pivotal role first-party data will play in capitalizing on these developments.
The demise of third-party cookies will create urgency to act Third-party cookie deprecation presents significant challenges for retail and consumer goods companies in terms of advertising targeting, cross-site tracking, and attribution modeling. Yet research shows that only 33% of companies are well prepared for their removal. Whether third-party cookies are discontinued in 2024 as planned or last another decade, retail and consumer goods companies can’t afford to wait to take action if they want to deliver on the transparency and trust that consumer’s demand. In the coming year, look for more companies to invest in strategies and technology that enable them to collect and use first-party customer data responsibly. This privacy compliant customer data will be the holy grail for retail and consumer goods companies looking to deliver personalized, value-added experiences to customers while safeguarding their privacy at the same time.
Customer Data Platform (CDP) adoption will accelerate The increasing importance of first-party data will be the driving force behind a growth in customer data platform (CDP) adoption – a market which is expected to grow to $5.6 billion by 2026. Most retail and consumer goods companies already recognize the strategic value of having access to unified and actionable customer data to enhance marketing efforts, improve customer engagement, and drive more effective decision-making. Moreover, as data privacy regulations become more stringent, a CDP gives companies the ability to collect and use customer data in compliance with privacy standards. An increasing awareness of these benefits, coupled with the evolving nature of customer-centric strategies, will drive more retail and consumer goods companies to adopt a CDP in the coming year to harness the power of their first-party data.
A focus on retail media and advertising Retail media is hardly a new concept. Retailers with ecommerce sites have long offered targeted advertising opportunities to brands selling their products on their platform. But the ‘dash to digital’ triggered by the pandemic has accelerated the growth of retail media. In fact, the retail media market is expected to reach $100bn as early as 2026. In 2024, look for more and more retailers to capitalize on this revenue-generating opportunity by launching their own retail media networks based on their own first-party data. This data is highly valuable for brands seeking to target specific audiences with personalized and relevant content. By leveraging their first-party data, retailers can create more effective and targeted advertising opportunities within their digital platforms, providing brands with a way to reach and engage their target audience in a more direct and contextually relevant manner.
CDPs for logistics and supply chain operations While a CDP is primarily used for marketing and personalization efforts, look for more retail and consumer goods companies to explore new use cases, including logistics and supply chain management. Just like a CDP links customer-facing systems, it can also act as a bridge to critical data sources within the supply chain, including product management and order management systems. By connecting these different parts of the business, a CDP can provide a holistic view of how products and services are sold and the journey they take through the supply chain. In 2024, look for more retailers to harness the power of their first-party data and a CDP to not only improve the way they engage with customers, but also enhance various aspects of their supply chain, from demand forecasting and inventory management, to logistics, returns, and customer service
Recession fears will remain While the U.S. economic outlook has improved throughout 2023, the economy isn’t necessarily in the clear heading into 2024. Consumer spending is expected to drop 1.1% in Q1 2024 and 1% in Q2 amid a “shallow recession” in the first half of the year. By embracing first-party data, retail and consumer goods companies can adapt more quickly to changing market conditions and ultimately emerge from a recession stronger and more resilient. When unified into consumer profiles, first-party data offers a wealth of valuable insights into individual consumers, including their behaviors, preferences, purchasing habits, and more. This in-depth understanding – paired with the tools to activate the data when and where it’s needed – enable retail and consumer goods companies to quickly adapt their product offerings, pricing strategies, and marketing tactics to align with evolving customer needs and economic realities.
The retail and consumer goods landscape is poised for dynamic changes in 2024. But with change comes opportunity. By strategically leveraging first-party data, these companies will not only weather current uncertainties but also lay the foundation for sustained innovation and growth in the years to come.
