Retailers Exercise Data Readiness Muscle to Boost Holiday Spend and Customer Loyalty

Data readiness is the ability of an organization to collect, manage and effectively use data. This concept is never more crucial than during the holiday season, which for many retailers represents their most important time of year.

As retailers seek to maximize their impact during this peak period and retain customers after the holiday season, the ability to leverage real-time data becomes even more critical.

A PYMNTS Intelligence report, “The Platform Business Data Readiness Survey: How Real-Time Data Can Drive Growth,” created in collaboration with Fiserv, examines the growing importance of data readiness for businesses aiming to optimize operations and unlock market potential.

The study reveals that 62% of platform businesses view real-time data as crucial to their strategies, with those leveraging such insights 1.5 times more likely to experience higher revenue growth. Real-time data facilitates quicker decision-making, enabling companies to respond to market changes, track customer behavior and customize marketing efforts to enhance engagement and conversions.

Data as a Retention Tool

In an interview with PYMNTS, Martin Qiu, Associate Professor, Lazaridis School of Business and Economics, Wilfrid Laurier University in Ontario, said how data readiness can offer retailers a range of tools to retain customers and elevate business performance.

“Data readiness offers retailers multiple means to boost business performance,” Qiu said. “Data readiness can facilitate converting new shoppers who are attracted by seasonal shopping promotions into loyal customers through strategic customer experience management.”

Specifically, Qiu added, during holiday promotions, retailers can capture first-time customers’ engagement through integrated feedback systems, ratings collection and social sharing initiatives, while correlating these insights with their purchase patterns.

“By analyzing this rich dataset, retailers can identify promising customer segments and develop targeted loyalty programs tailored to their characteristics,” he said. “By doing so, retailers can nurture these relationships beyond the holiday season, effectively converting seasonal buyers into return customers. This data-driven approach to customer experience highlights the value of data readiness in customer relationship management (CRM).”

Gleaning Insights

Expanding on this, Sudip Mazumder, senior vice president, retail industry lead, North America, at digital consultancy Publicis Sapient, told PYMNTS a solid data foundation is essential for capturing valuable customer insights during the holiday season.

“Data readiness plays a pivotal role in data capture during the holidays and post-holiday engagement, offering numerous benefits to retailers,” Mazumder said. “Omnichannel integration facilitates seamless customer journeys during the holiday season. Data readiness ensures a smooth transition between online and offline channels, enabling retailers to track customer behavior across various devices and touch points.

“A robust data foundation allows for personalized experiences, as retailers can analyze customer data to tailor product recommendations, promotions and experiences to individual preferences during the holiday season,” he added. “Additionally, data-driven optimization enhances checkout processes, reducing cart abandonment and improving conversion rates. Integrating loyalty programs with data collection systems can further capture valuable customer shopping preferences.”

After the holidays, Mazumder said retailers can leverage this same data for post-holiday engagement and retention.

“Regarding post-holiday engagement and retention, retailers can use the data captured for advanced customer micro-segmentation, allowing targeted marketing,” he said. “Retailers can deliver highly personalized marketing campaigns by segmenting customers based on purchase history, preferences and demographics. This approach includes offering tailored promotions and discounts to encourage repeat purchases and foster customer relationships even after the holidays.

“Lifecycle marketing strategies, such as win-back campaigns, use data to identify inactive customers and re-engage them with personalized offers and incentives,” Mazumder added. “Retailers can also identify opportunities to enhance the shopping experience and strengthen customer relationships by analyzing customer journeys.”

This data-driven approach extends beyond customer engagement and retention, also playing a crucial role in product development and innovation after the holiday season, Mazumder said.

“Data also supports product development and innovation post-holidays,” he said. “Analyzing trends helps retailers identify emerging consumer preferences, informing future product development and assortment planning. Evaluating customer feedback and reviews provides valuable product improvement and innovation insights. By prioritizing data readiness and effectively leveraging customer data, retailers can optimize their holiday season performance, build stronger customer relationships and drive long-term growth.”

What Businesses Can Do With Data

Bellamy Grindl, principal and founder of Retailytics, told PYMNTS that data readiness is key during the holidays, “especially for brands that see a big revenue spike. For seasonal brands, November can be as big as 25% of annual revenue.”

Grindl offered some best practices for retailers:

• Segmenting shoppers to focus on high-value customers versus one-time buyers.
• Using real-time data to adjust inventory, pricing and promotions on the fly.
• Personalization, like tailored emails or product recommendations, to boost conversion.
• Launch retention campaigns post-holiday to turn seasonal shoppers into loyal customers.
• Keep teams aligned so decisions are driven by shared data insights.