Skip to content
All Blogs

How to use your retail loyalty program to gather zero-party data

Author: Lindy Porter


As a CMO, you’re always looking for ways to gather data about your customers. After all, the more you know about them, the better you can target your marketing efforts. But what if I told you there’s a way to gather data about your customers without them even knowing it? It's called zero-party data, and it's collected through retail loyalty programs. Here's how it works.

What is zero-party data?

Zero-party data is information that customers willingly and actively provide. This can include things like their name, email address, birthday, and so on. All this information is willingly given by the customer with the expectation they’ll receive something in return, such as coupons or special offers. And since the customer is voluntarily providing this information, it’s much more likely to be accurate and up-to-date.

But why does any of this matter? After all, doesn't your company already have all this information? Maybe, but chances are it's outdated or inaccurate. And even if it’s accurate, do you really know everything about your customers? Probably not. With zero-party data you can get to know them on a much deeper level so you can better target your marketing efforts.

For example, let's say you have a customer who frequently buys products from your company. You know their name and email address, but that's about it. With zero-party data, you can capture things like their birthday, anniversary, and favorite products. This allows you to send them targeted coupons and offers on the products they love. As a result, they're much more likely to make a purchase from your company. Not only that, but they're also more likely to be loyal to your brand moving forward.

So how do you gather zero-party data through your retail loyalty program? It's simple: offer incentives for customers to provide this information. This can be in the form of special offers, personality profiles, or even entry into a contest. And make sure you have an easy and secure way for them to provide this information, such as a dedicated section on your website, or a loyalty program.

By using your retail loyalty program to gather zero-party data, you can better target your marketing efforts and improve customer loyalty.

What is a retail loyalty program and how does it work

Retail loyalty programs are an effective way for companies to incentivize and reward customers for their loyalty. By signing up with retailers, customers can use the loyalty program to accrue points, discounts, free items and more. Typically, retail loyalty programs are based on collecting personal data or zero-party data from customers such as name, email address, and preferences. Encouraging visitors to enroll in a loyalty program allows businesses to understand and analyze customer behavior such as how often customers visit a store or website or purchase particular items. Retailers can then use the data collected to provide tailored offers, coupons, and recommendations that meet their interests. It also allows retailers to incentivize customers for repeat business and offer discounts for loyalty. They’re designed to increase customer retention through repeat purchases while encouraging customers to try new products or services. All in all, retail loyalty programs leverage the power of data to emotionally connect with people for a more enjoyable retail experience. With retail loyalty programs, businesses can increase sales, build better customer relationships, and convert casual shoppers into loyal customers - all of which positively contribute to their bottom line.

How can you use your loyalty program to gather data about your customer

Running a retail loyalty program is a great way to show customers they’re valued. As loyalty grows, so too does the opportunity to gather data about what your customers want on an individual level. A well-crafted retail loyalty program can be used to capture zero-party data with minimal efforts. This insightful information can be acquired with a combination of surveys, direct communications, transaction records, and higher-value reward offerings. Creative engagement opportunities can also be seized based on the specific retail business – for example a beauty profile for a makeup retailer, design competition for a home goods retailer, or a DIY quiz for a home improvement store. That 'optional extra' translates into actionable customer insights for your retail business that can be used for marketing purposes such as audience segmentation and personalization. In today’s competitive environment, what retail business wouldn’t welcome a bit more consumer insight?

What are some of the benefits of using zero-party data

Since zero-party data is collected directly from the consumer, the reliability and accuracy of the data can’t be matched. It also helps to build the relationship between the consumer and the brand, showing customers you care about their preferences, behaviors, and motivations – not just their purchase history. Zero-party data is also explicitly consented, and direct – with no reliance on cookies or IDs. Consumers willingly provide the information, with full transparency into how it will be used - which is a key benefit these days while privacy-focused marketing is at the top of the list for customer experience.

Zero-party data gives retailers the ability to really “get inside the head” of their consumers and take personalization to the next level – it’s marketing magic! And of course, the somewhat overlooked benefit to zero-party data is the collection itself – it’s a perfect opportunity to showcase your brand’s personality and build your business persona in the minds of both customers and prospects!

How can you use zero-party data to improve your retail marketing campaigns

Retailers have always found success in customizing offerings to customers. In recent years, however, zero-party data has taken this trend to the next level. For retail marketers, zero-party data is the key to unlocking personalization superpowers. It’s a gold mine for consumer insights that can help modify your campaigns in response to individual preferences and habits. With such consumer intel, retail organizations can tailor their marketing to the specific interests of each customer and send promotions and product offers that really hit home. Sure, collecting and efficiently using vast amounts of consumer data may seem daunting at first, but with strategic use of zero-party data and a true real-time CDP this process becomes practically effortless. Don't be discouraged by increasing retail complexities – taking advantage of zero-party data will drastically improve your retail marketing campaigns!

Examples of companies that are using zero-party data to improve their business outcomes

Companies that leverage the power of zero-party data and customer loyalty programs see major benefits, including enhanced customer personalization, upsell opportunities, increased engagement, and an unparalleled differentiation from their competitors. Many retail giants, such as DSW, Sephora, and Starbucks have integrated loyalty programs into their retail models. Designer Shoe Warehouse (DSW) for example, runs a seamless VIP loyalty program that utilizes first-party data to recognize consumers based on their name, phone, or payment info. They maximize the use of their loyalty program by sending highly personalized emails with points reminders, deals loyalty members are eligible for, and a snapshot of the customer’s brand interactions.

Starbucks was a trailblazer in loyalty program apps, making it radically easy for customers to collect and use their rewards – no sign-in or punch card required. Sephora, a beauty retailer, is well-known for their “Beauty Insider” program and community, adding a personal element that strengthens their brand image. Their beauty profile is a perfect example of the power of loyalty programs and zero-party data collection. Customers input their specifics, like skin, hair, and eye color so they can be matched with personalized recommendations. Preferences and interests are captured and activated to further customize every interaction. 

Loyalty programs and zero-party data are a perfect match, and the brands who capitalize on this form of extreme personalization elevate their brand image and reap the rewards – in fact, McKinsey reports that consumers are 62% more likely to spend more on a brand after joining a paid loyalty program.

As retail has evolved to become more consumer-centric, marketing success depends on personalization. Using a retail loyalty program to capture zero-party data is one strategy that can be used to improve marketing campaigns; it's all about giving customers a voice and allowing them to share aspects of their lifestyle with brands to create more granular, tailored offers that deliver an increased level of value. By gathering both first and zero-party data such as preferences and buying history, retail businesses can create personalized experiences that make customers feel appreciated and empowered. Ultimately, zero-party data helps retail marketers unlock the invaluable insight needed to generate one-to-one strategies for maximum ROI and targeted personalization.

And it’s a two-way street - more personalized retail marketing results in improved customer satisfaction and retention due to increased trust between the business and its customers. A glorious circle of success. In short, zero-party data is revolutionizing retail experiences, providing an effective way of gaining more loyal shoppers!


Subscribe to our blog for regular updates!