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Uncertainty is a certainty for 2021, but there are some clear and predictable expectations around identity that marketers can capitalize on, with the shift away from third-party cookies and other markers like Apple’s Identifier for Advertisers (IDFA). Here’s what you need to know.

There are big changes coming within the data landscape. To meet them head-on, a key objective for many forward-thinking brands has been a renewed focus on digital transformation and the ethical collection, management, and use of first-party consumer data.

First-party data will take center stage and earn the majority of resources for the remainder of 2020 and beyond, with 57.1 percent of the study’s respondents already reporting an increase in their first-party data usage, according to the Interactive Advertising Bureau (IAB)'s recent State of Data report, A strong data foundation coupled with a digital-first mindset has helped brands weather the Covid-19 crisis and even sustain or increase growth.

Heading into 2021, marketers will need to continue to pivot their approaches, especially when it comes to how they interact with customers. The overall experience is key. To prepare, marketers need to think about the following considerations:

  • How have our customer preferences shifted in 2020?

  • How can we best meet their newly formed habits and needs?

  • How can we use our newly acquired data to best communicate with customers?

Changing customer preferences

It’s no wonder that a major pandemic changed the way customers shopped, behaved, and went about their day-to-day lives – and one of the most notable shifts we’ve seen across industries is the move to e-commerce. In a report by eMarketer on US e-commerce trends in 2020, online spending is projected to take up 18% of all consumer spending, compared to just 14.9% in 2019. The fastest-growing categories encompass essential needs like food and beverage, health, personal care, and beauty. And while this same report projects a slight dip in the recent uptick for e-commerce in 2021, overall growth in the category is projected to rebound and continue upward.

It is imperative that marketers study the online buying habits that consumers have developed in these key categories and to incorporate those behaviors into their strategies. And more specifically, it’s important for marketers to dig deeper into those consumer trends.

Quick service restaurants are seeing a dip in commuter traffic, but an uptick in online ordering.  Restaurants like McDonald’s anticipate these consumer trends sticking, even as life returns to “normal,” with new plans in place to put an emphasis on more contactless options for ordering, kiosks in restaurants, and delivery services.

Meeting new customer habits and needs

Taking a closer look at these trends, it’s clear that digital is increasingly personal and customers now expect deeper interactions with brands. Fast food is just one example of an industry that’s adapting to cater to these preferences. Retail is another experiencing big shifts, engaging with consumers based on their new habits in the environments they prefer.

Virtual fitting rooms are replacing the in-store experience. With the help of augmented reality (AR)/virtual reality (VR) technology, fashion companies are bringing the customer experience inside homes, and the sky’s the limit. Enhancing your existing apps and technology can result in major benefits for both your company and your customers as they look to meet new customer needs.

Loyalty programs are another way for brands to be identity-driven. Digital consumers crave convenience and engagement. And through tailored in-app offers or personalized rewards, brands can provide unique experiences that consumers will appreciate, and will build loyalty toward brands.

Activating audiences across all addressable channels can allow brands to achieve specific business results. The key is to understand customer needs are now and create new ways to address them. Customer identity is more than just creating a singular view of a target audience. Indeed, it is the backbone for creating these customer experiences and unifying marketing to individuals. Identity and personalization allow marketers to break through preferences and expectations to gain clarity on their customers.

Using data to improve customer communication

The role of identity becomes even more critical as brands analyze their customers’ changing behaviors and the best ways to adjust their communications with them. Hyper-personalization and targeted offers are going to become increasingly difficult for brands to enable once third-party cookies and other tracking mechanisms are disabled.

Equally important to note are customer preferences for brand communication. Losing the ability to enable third-party cookies does not mean consumers can’t have an experience tailored to their needs and wants. Most consumers are willing to engage with brands and share personal information in order to have a more personalized shopping experience.

Marketers can prepare for the changes on the horizon in 2021 by adopting a formula for customer experience management success:

Data transformation + digital transformation = customer experience transformation

Data transformation comprises the privacy-safe acquisition, management, mining, and activation of valuable data that informs customer experiences in real-time. Digital transformation involves the design and implementation of digital marketing, sales, service, and commerce experiences that are contextually relevant and personally informed. These endeavors support innovation that enables customer experience transformation, driving competitive differentiation, and measurable business results.

Great customer experience across the entire spectrum of the customer life cycle is more important than ever. In order to truly transform this experience, brands must fortify their first-party data and bolster their digital enablement capabilities. If you get these two parts right, you’ll have the tools needed to best reach consumers and offer a total customer experience. By following this winning formula, you should be well on your way to achieving the desired outcome and be ahead of the curve in anticipation of the challenges that lie ahead in the coming year.

Craig Dempster is global CEO of Merkle

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