Adoption of customer data platforms (CDPs) has really taken off in recent years, especially in retail. There are more than 9,000 marketing tools and platforms available today, and that number is growing annually. As more vendors have introduced CDPs, it’s created quite a bit of confusion about what constitutes a CDP and the breadth and depth of capabilities offered. Some of the complexity lies in determining which CDP functionality retailers need to use in terms of real-time decisioning, data handling, identity management, privacy compliance, and related services.
At their most basic, CDPs address the need to create a single customer view across data and marketing channels. This is especially important for retailers given omnichannel shopper journeys and paths to purchase, and the pending deprecation of third-party cookies. CDPs enable real-time personalization and can help retailers’ marketing organizations tackle the transition to an environment without third-party cookies, particularly when it comes to prospect and acquisition marketing. Retailers typically adopt CDPs for three key reasons: (1) customer data collection, analysis, ingestion, and integration, (2) marketing, advertising, and activation, and (3) real-time personalization.
To get the most from a CDP, retailers must first define their use cases and then determine how a CDP supports their data strategy, marketing goals, and business objectives. More importantly, this is essential to helping them decide which CDP is right for their use cases and the customer experience they want to enable.