Retail data monetization: Your next source of revenue
By Rosemary Hua, Global Head of Industry GTM, Retail & CPG, Snowflake
The disruption of the past two years has forced the retail industry to get more creative with data to keep supply chains moving and stay ahead of wild swings in demand. One fast-growing area has been the increase in data sharing among partners and customers, and we’re entering an era in which data monetization is likely to become a significant source of income throughout the industry.
Retailers have always used third-party data, of course, but cloud data platforms and cloud marketplaces now make it easy to share data quickly and securely with a wider set of players. That’s why so many retailers were able to quickly tap into COVID-19 data from Johns Hopkins University, for example, to understand infection rates and better predict demand in the pandemic.
This is now going further, and we’re seeing a new cast of players selling data and insights to a wider set of buyers. Besides generating new revenue, this increased data sharing will help the industry react faster to changing global conditions and manage their operations more efficiently. It will also produce winners and losers, so smart companies should get on board fast.
Historically, brands and CPGs have turned to providers like Nielsen and IRI, which act as clearing houses for aggregated data about consumer buying behavior. This data continues to be highly valuable, but we’re now seeing retailers and other industry players share data directly with brands. Albertsons is providing insights through a partnership with Kraft, for example, while Kroger 84.51 and Walmart have stepped up their data monetization.
These retailers are providing enriched, granular point of sale data and insights that brands desperately need to target their products successfully in an increasingly omnichannel world. This includes popular keywords, search terms and inventory turn information, as well as customer segment data, to help refine targeted marketing campaigns.
And it’s not just retailers. Any company with granular transaction data is in a position to monetize the intelligence they have. That includes delivery services like Instacart and Deliveroo, as well as loyalty providers like Groupon and those offering omni-channel panel insights like Numerator or Ibotta. The traditional aggregators also have a huge opportunity to sell data more widely if they take advantage of the data sharing capabilities in modern cloud platforms.
On the buyer side, the market is broader than just CPGs. Imagine a hedge fund, for example, evaluating whether to invest in a startup developing a smart bread machine. They would want to know how sales of bread mixes have been trending in recent quarters, who’s buying them, and where.
The uses for these insights are almost endless, and the cloud is making them easier to share. In the past, sharing data externally meant building, securing and maintaining data pipelines for each partner and each data source, requiring a heavy, ongoing investment in IT. Now, cloud marketplaces allow a business to share data with any other company in that marketplace at the click of a button.
Business models vary. Some companies will form alliances and exchange data freely, but the cloud also makes new pricing models possible, such as pay-as-you-go pricing. A pharmacy chain could sell its foot traffic data for $0.10 per query, for example, or 1,000 queries for a fixed monthly fee.
To help retail players get started, consulting firms such as Slalom Consulting and dunnhumby now provide a variety of services to help companies monetize their data. These services can cover areas such as auditing and cleaning data, getting data into the cloud, and even handling incoming data requests.
If you prefer to do it in house, cloud providers also offer services. Snowflake just released an in-product monetization tool (currently in public preview) that allows our customers to monitor usage and calculate billing. Our go to market arm helps companies set pricing for their data and initiates contact with the biggest CPGs.
Data continues to transform all areas of business, and monetizing data by sharing it with partners and customers is the latest fast-growing opportunity. It provides a way to increase revenue while better serving customers, so I encourage you to explore the possibilities now.