Responsible for public awareness, brand association, and business-to-target-market communications, advertising and marketing more generally are essential to any business hoping to sell its products – they are the departments of perception.

It’s therefore no wonder that retailers and brands spend so much money on advertising. Of course, given the technical revolution of the past twenty years, so much of this is now spent on digital marketing; in the UK alone, Big Tech rakes in approximately £26 billion every year from companies choosing to advertise on the likes of Google and Facebook.

But what is the fundamental purpose of this enormous expenditure? Like almost every expense in business, it is designed to be self-fulfilling, delivering a significant and measurable return on investment. With marketing, the purpose is usually to activate a pool of consumer spending, redistributing it away from competitors, or releasing an untapped market segment. Yet, over the past year, the size of that pool has contracted considerably, placing a diminishing return on advertising investment and threatening the security and viability of many businesses across the country.

Indeed, you need only glance at the front page of any newspaper, buy a loaf of bread, or ask anyone ‘how they’re doing?’ to feel the inescapable squeeze of the cost-of-living crisis. Rising inflation, global supply chain issues, and a lacklustre UK economy are destroying living standards. So great is the damage that the UK’s independent Office for Budget Responsibility has estimated the biggest fall in real household incomes since records began over half a century ago.

Retailers and brands must become wiser, recognising that their greatest challenge is also their customers lack of disposable income. They must change tactics from just selling to selling, incentivising, and rewarding. Perpetrating this perception will be key to effectively reaching their target markets. Integral to this is the application of far-reaching product-level shopping data.

EVENING THE ODDS: PRODUCT-LEVEL DATA

Before being able to market a product, the product must be right. With retail revenues under significant strain, the consequences of poor product development and bad performers pose existential threats to business security.

Therefore, retailers, brands, and product developers everywhere must understand the needs of their customers to a much greater extent than ever before.

Fortunately, consumer data provides a powerful tool to navigate the wider market, providing a quantifiable analysis of otherwise qualitative theories on the movements, spending patterns, and shopping habits encapsulating the target customer.

Such data can explore various trends, such as when and how consumers like to shop, or the types of products they buy, and even how much they spend across various sectors. While these fascinating observations enable an understanding of macro market trends, the most powerful consumer data is that which is magnified up to the product level.

Product-level data reveals an item-by-item account of the total expenditure in a customer's shopping basket. This means that brands can conduct a detailed analysis of product appeal against competitors and emerging markets, allowing them to identify the trends activating their target customers. Moreover, it allows a business to filter its advertising by factors relating to shopping behaviour and history, consequently, it can reach its target customers directly, potentially with exclusive offers to convert them from their go-to brands.

DIRECT-TO-CONSUMER MARKETING PLATFORMS

With demand for such data expected to boom amid the urgency for business security, the need to obtain this precious resource is fast emerging. Yet, its rare and elusive nature presents challenges both for retailers and the data brokers who compile and package it (second-party data). Fortunately, direct-to-consumer (D2C) marketing platforms provide an untapped gold mine.

D2C marketing platforms bridge the knowledge and advertorial gap between retailers and target customers by providing a direct communication channel through the application of product-level data. With access to consumer shopping bags across the world’s biggest physical retailers, e-commerce, and digital stores – Amazon, Asos, Google Play – such platforms’ pools of itemised data are unmatched. Application of this data toward advertising offers a direct connection to target customers and a powerful way to compete at a time when it is increasingly difficult to activate consumer spending.

For example, suppose Marks and Spencer’s have identified sales across cold food have remained consistently strong but ready meals are unforeseeably suffering. Itemised consumer data would enable them to peek into the shopping bags of their customers, as well as those from other stores, revealing that the same M&S cold food customers are now buying ready meals from Waitrose. Subsequently, they can use this information to contrast their products against Waitrose and inform their product development. Equally, they can directly target consumers who buy ready meals from Waitrose with exclusive offers to bolster their market share.

BOOSTING CONSUMER SPENDING POWER

But these platforms are also going much further and helping to combat both the nation and retail’s greatest challenge – declining disposable incomes.

Their consumer proposition is based on providing users with cash rewards in exchange for their shopping data. Such moves are changing the data ecosystem, reasserting rights over individual shopping data back into the hands of its creators, the consumers.

Having for so long been forced to accept invasive cookies and tracking measures – enabling Big Tech to sell digital adverts and take in huge profits, consumers rightly ask the pertinent question of why – as the creators of such data – should they be the only group excluded from its monetisation? With an intrinsic commission and exchange mechanism built into the platforms, D2C platforms have been prolific in challenging the status quo and reimbursing consumers for their data.

As consumers face the biggest drop in living standards in the modern British era, businesses are naturally concerned about declining revenues; mismanagement of funding could result in extinction. Nowhere is this fear more pervasive than in the retail, e-commerce, and digital sectors.

Fortunately, D2C marketing platforms provide businesses with an analytical tool which strengthens product development and enables them to directly reach relevant target markets, in turn raising the likelihood of activating new pools of consumer spending. This is further enhanced by the platforms’ offers to consumers: cash rewards from their everyday spending which not only creates a fairer data ecosystem but completely new revenue streams. With businesses threatened by the squeeze on consumer finances, it is both logical and important that solutions provide benefits across the entire economy – consumers should not be left behind.