DX3: How Technology Can Improve Retail Marketing in a Recession and Beyond
Data and AI can help retailers market their brands strategically, even under recessionary budget constraints.
How can retail marketers extract the best value from their data today, especially when an economic downturn puts pressure on their budgets?
That conundrum emerged as the key theme of a panel discussion called “Marketing in the 2020s” at DX3 Toronto, Canada’s biggest conference and trade show devoted to retail, marketing and technology.
The first part of the chat revolved around data. As of Jan. 1, 2023, four U.S. states (Colorado, Connecticut, Virginia, and Utah) have followed California’s lead by starting to enforce new GDPR-style laws around data privacy. Jurisdictions around the world are increasingly regulating how businesses collect and use data, adding another layer of responsibility for retail marketers.
“Customer data programs become more important over time,” said panelist Jeff Burlin, Director, Executive Engagement Programs at Twilio.
“The onus will be on us as businesses to own that, engage, and be good stewards of data in how we’re collecting it and why we’re collecting it. The internal processes that we invest in will have to change as well.”
While technology can help brands manage customer data in a legally compliant way, the DX3 panel also debated a deeper question: how to harness data for strategic marketing, particularly through AI and personalization.
AI and personalization
According to a 2022 survey by Advertiser Perceptions, 53 percent of U.S. marketers have used AI and ML in contextual targeting. Now that AI and ML are widely available to almost every company, the data – not the technologies themselves – must become the real differentiator for brands, Burlin said.
“It’s the things you can use to input for those (AI) models that sets your brand apart and allows you to build a more authentic, trusting (customer) relationship in the end,” he said.
The potent combination of data and AI can enable personalization, which consumers now appear to accept as part of the modern marketing process. A 2022 survey of more than 2,000 U.S. consumers revealed:
- 70% of consumers expect to receive something in exchange for giving a brand their data
- 90% are willing to share more data about themselves if they have a positive experience with a brand
- 49% would share even more information if they:
- Had a positive experience with the brand
- Received offers tailored to their interests in return
For marketers, personalization technology means “niche is the new mass,” said panelist Jeremiah Curver, Co-Founder and CEO of Polysleep.
Using personalization tech to market to individual customers rather than an entire segment can be risky if it’s done in a way that’s spammy rather than savvy, warned panelist Susan Irving, CMO at Kruger Products. She said personalization must be centered around the needs of the consumer, not the marketer.
“I wake up in the morning and my inbox is full from companies I love. But now I’m getting four or five emails from them a day. Unsubscribe, unsubscribe, unsubscribe. Or in my Facebook or Instagram I’m served up multiple ads. So the landscape is really changing and we have to think hard about how we use data. Because when you lose brand trust, you will never get that consumer back,” Irving said.
Recession-proof marketing
Executing all these plans to improve data-based, personalized marketing could be challenging if marketers see their budgets slashed during the ongoing economic downturn.
Irving views a recession as an opportunity for brands to stand out even more in a marketing landscape that’s quieter and less crowded thanks to industry-wide spending constraints.
“It costs you less to gain share in a recession because there are so many other companies scaling back. It’s more cost-effective to advertise in a recession. It’s the perfect time to grow your share,” she said.
It also costs more to gain new customers than retain existing ones, Burlin added. He believes marketers should put a special focus on customer retention during a recession.
“You have to make smart investments in creating stickiness and retaining customers you already have. And that’s across every touchpoint, not just the radio or TV ads or email. Every time (an existing customer) contacts support or talks to one of your people, all those milestones in the customer journey during these down cycles are really a powerful springboard for what happens in the upswing after a recession.”
Curver cautioned budget-conscious marketers not to abandon investment in initiatives that can eventually lead to long-term brand growth. For example, he noted that despite recession worries, his company invested in creating its own studio to craft longform content like podcasts.
“In uncertain times, many brands will see success from the equity they build throughout the years. Shift that dollar towards building a strong brand so that when things are strong again, you can massively collect on that investment,” he suggested.
Panelist Stephen Bailey, CMO at John Fluevog Shoes, left the audience of DX3 marketers with a parting reminder that in the toughest of times, adversity often sparks untapped creativity.
“It forces us to be even scrappier than we have been. Sometimes that panic of budget cuts makes us more creative. There’s a benefit to that kind of pressure as well,” he said.
Christine Wong
Senior Technology Staff Writer, Orium
I've been telling enterprise technology stories for almost three decades in print, online, and on television. I started out in journalism, covering the telecom boom, the birth of social media and the emergence of digital commerce. I'm always looking for the human angle in every technology story I write.