Why Is First-Party Data Must for a Brand’s Survival in the Digital Age?

Since 60% of consumers (source: forbes.com) prefer buying products directly from a brand's website, the stage is set for D2C brands. Moreover, perks like higher profit margins and more control over brand messaging make D2C a lucrative model for brands.

Good products, excellent marketing, and customer satisfaction are the pillars of a successful D2C brand. And all of these require you to know your consumers really well.

Here's where first-party data comes into the picture. The right first-party data collection strategy can help D2C brands understand customers better, inform marketing campaigns, and increase revenue.

Here's why first-party data is essential for D2C brands in this digital age, plus how to collect it.

What is first-party data?

First-party data refers to the data you collect directly from customers when they interact with your brand.

Here are some common channels for collecting first-party data.

• Website and landing pages
• Mobile apps
• Social media
• Surveys and forms
• Email
• CRM

Direct-to-consumer: A quick overview

Direct-to-consumer or D2C is a business model in which businesses sell "directly to consumers" instead of selling through marketplaces, supermarkets, and other third parties.

D2C brands primarily sell online through their own website. And since 33% of the global population buys online, it's easier for D2C brands to reach their customers.

Note: Some larger D2C also sell offline through brand outlets. That said, digital continues to be the most common sales channel for D2C brands.

The D2C business model has several benefits:

• Higher margins and increased profitability
• Increased control over brand messaging
• Stronger brand loyalty
• Direct access to consumer data

Of these benefits, the last one - direct access to consumer data - is what we're focusing on right now.

Importance of first-party data for D2C brands

Let's understand why collecting first-party data is a must for D2C brands.

Accurate customer profiles

First-party data from various sources enables you to create accurate customer profiles. These profiles help you understand your customers really well, including their demographic and behavioral characteristics.

Effective personalization

Access to accurate customer data enables brands to offer personalized experiences to consumers. This results in higher customer engagement and, thus, more sales and revenue.

Data-driven marketing

First-party data helps you run targeted marketing campaigns. You can segment consumers based on their behaviors and preferences, resulting in more relevant and data-driven marketing.

Higher loyalty and retention

The benefits of first-party data go beyond acquiring new customers. It can also help you engage existing customers, resulting in repeat purchases, higher loyalty, and recurring revenue.

Reduced customer acquisition costs

Businesses spend a lot of money on customer data and acquisition. This number can be even greater for D2C brands as they need to reach consumers directly.

By collecting first-party data, you can create your own customer database instead of spending money on purchasing customer profiles and lists.

Moreover, first-party data is significantly more accurate than third-party data.

Note that D2C brands aren't the only ones to benefit from first-party data. Brands across industries can utilize first-party data to increase sales, profitability, and customer experience.

How to collect first-party data?

Now that the benefits of first-party data are established, let's look at some actionable steps you should take to collect it.

Here's how D2C brands can collect first-party data.

Use QR codes on product packaging and advertisements

Several retail and D2C brands use QR codes to increase customer engagement and collect first-party data.

By placing QR codes on product packaging and offline advertisements, you can bring people to first-party data collection channels.

For instance, with QRCodeChimp, you can create a form QR code that directs consumers to a feedback or survey form. Likewise, you can generate QR codes to link directly to websites, email lists, and social media profiles.

If you create dynamic QR codes, you also get QR code analytics like the scan location and device information. Combine these insights with your overall marketing analytics to make informed decisions.

Analyze website data

The website is inarguably the most important sales channel for D2C brands. Tracking website user activity can help you generate valuable insights, such as the visitor's location, gender, age, interests, and language.

Use free website tools like Google Search Console and Google Analytics to gather valuable first-party data from your website.

Track mobile app user behavior

74% of mobile shoppers use a retailer's app, making mobile apps a lucrative sales and data collection channel for brands.

Just like a website, your mobile app can provide valuable first-party customer data. This includes demographic and psychographic information like location, age, gender, and interests.

Conduct customer surveys and collect feedback

Surveys are another simple and helpful way to collect first-party data. You can use forms on websites, emails, and social media to gather consumer insights.

Free tools like Google Forms allow you to create free forms and share them across channels.
Think of a D2C brand that sells athleisure clothing. It can run a survey asking consumers what type of products they're most interested in. Customers need to enter their email addresses to submit their responses.

As a result, the brand can get valuable insights into the type of products the majority of consumers are interested in. This information can help in developing new product lines.

Offer rewards and coupon codes

Loyalty programs are a powerful purchase driver. 83% of consumers say that belonging to a loyalty program influences their decision to buy again from a brand.
In addition to increasing repeat purchases, loyalty programs are also an excellent medium for collecting first-party data.

When onboarding consumers to a loyalty program, brands can collect crucial information, such as location, lifestyle choices, and preferences to know them better.

If creating a loyalty program seems like a big commitment, providing coupon codes is an easy alternative. You can make one-time coupon codes and allow customers to redeem them by sharing their email addresses and other information.

Final thoughts

To wrap things up, D2C brands are on the rise as shoppers align towards purchasing directly from brands. Collecting first-party data is crucial for D2C brands to run targeted marketing campaigns and improve customer satisfaction.

QR codes, website analytics, and customer surveys are common methods to collect first-party data.

The right first-party data collection strategy can help brands reduce customer acquisition costs, increase marketing ROI, and multiply revenue.