A practical guide to CDPs for retail teams

Essentially, a CDP collects data from a variety of sources and then merges that information into a single customer view or profile. The CDP consolidates, and de-duplicates where necessary, customer information—ideally, without an IT team intervening and doing it for you.

But CDPs aren’t all built the same, and for most retailers, deciding to incorporate one is only half the battle.

When CDPs first hit the market, they were built as standalone platforms that you’d add to your existing tech stack to wrangle all your data. The irony of adding another tool to your toolkit to consolidate customer information is not lost on us.

The problem with standalone CDPs is that they exist solely to collect and unify data. Not surprisingly, martech leaders have gotten mixed results from standalone CDPs: according to Klaviyo’s recent research with Forrester, 68% of martech leaders feel their current CDP is insufficient for better marketing and analysis, while 75% say managing their CDP is more expensive than they anticipated.

While your mileage may vary, marketers often point to a few specific reasons why standalone CDPs create more challenges than they solve:

• The technical bar is too high. Standalone CDPs are so complex, marketing teams have to rely on a data engineer or developer to use the data for personalization, implement on-site data tracking, or even just sync profiles to the tools they use every day.
• The data isn’t actionable. Even as AI- and machine learning-powered predictive analytics become more common in standalone CDPs, these insights are often locked inside the CDP, which makes it difficult for marketers to put them into action.
• Standalone CDPs add to tool sprawl. A traditional CDP just adds another tool to an already difficult-to-manage tech stack.

While CDPs were once sold exclusively as standalone products, an embedded CDP is built directly into another system, like a CRM. That allows retailers to collect, unify, and activate their customer data without investing in yet another tool.

The Forrester research found that martech leaders are already reaping the benefits of embedded CDPs. Here’s the proverbial proof in the pudding:

• 80% of martech leaders believe an embedded CDP can help increase efficiency and enable actionable marketing insights.
• 76% of martech leaders agree a fully integrated CDP can remove distance between systems and unite data across tech stacks.
• 72% of martech leaders believe an embedded CDP can help reduce costs via fewer integrations and less maintenance.

Retailers have unique needs when it comes to choosing a CDP. High transaction volumes, omnichannel journeys, and seasonal spikes all put specific demands on your data infrastructure. Here's what to prioritize when you're evaluating options:

For most retailers, the next dollar of profitable growth comes from existing customers, not new ones. Acquisition still matters and always will, but paid media volatility and margin pressure from discounting make it harder to rely on exclusively.

According to Forrester's 2024 US Customer Experience Index, customer-obsessed retailers retain more customers and grow faster, with repeat buyers driving a larger share of revenue over time. That's why the strongest retail CDP programs usually start with retention.

With the clean profile data and fresh event signals an embedded CDP provides, your team can:

• Catch customers before they churn. When a shopper's purchase frequency starts to drop, a CDP flags it. You can automatically trigger a win-back message with the right offer before they're gone.
• Send replenishment reminders at the right time. If a customer buys a 30-day supply of a product, a CDP calculates when they're likely running low and triggers a reorder reminder timed to their actual purchase, not a generic schedule.
• Protect margin by discounting smarter. Not every customer needs a promo code to convert. A CDP helps you identify who regularly buys at full price, so you can reserve discounts for the customers who actually need the nudge.

Dog gear brand Ruffwear uses RFM-based retention flows in their embedded CDP to focus discounts where they have the most impact: disengaged customers. In 6 months, Ruffwear’s discount rate—the ratio of discounts to sales—dropped 10% YoY, while overall revenue grew 9%.

Menswear brand 2(X)IST uses RFM segments to support two strategies. When a customer enters the “needs attention,” “at risk,” or “inactive” segments, it triggers a segment-specific email retention flow with a personalized discount. 2(X)IST also structures their Meta remarketing campaigns around RFM segments, spending less on ads for loyalists likely to buy on their own. That drove a 61% YoY increase in Facebook ROAS.

• Most retail teams have more personalization tools than ever, but customers often don't feel it.

Deloitte Digital's 2024 personalization report found that consumers recognize only 43% of their experiences with brands as personalized, while brands say they actually personalize 61% of them. That gap is expensive: the same report found that 67% of consumers spend more when personalization reflects an understanding of their needs.

The difference usually comes down to data quality. An embedded CDP gives you behavioral context: what someone bought, browsed, and returned, and what they've responded to before. With that, you can:

• Recommend products based on a customer’s whole self. Without a CDP, recommendations are limited to recent session data. A CDP surfaces lifetime purchase history across in-store and online touchpoints, so you can recommend confidently based on all of a customer’s preferences, not just the latest ones.
• Calibrate how often you should reach each customer. Some customers buy on their own schedule and disengage when you over-message them. A CDP tracks engagement history across channels so you can optimize send frequency by individual, rather than sending on the same cadence to everyone.
• Tailor the offer to the customer's actual value. Two customers browsing the same product may warrant very different messages. A CDP tells you which one has bought 12x in two years and which is on their first repurchase, and helps you treat them accordingly.

Outdoor cooking brand Gozney uses product purchase data in their CDP to identify which accessories customers typically buy after their first oven purchase, then surfaces those products automatically in post-purchase flows for first-time buyers. Strategies like these have helped Gozney boost retention 24% YoY.

Retail journeys don't happen on a single channel. Customers browse online, check in-store availability, buy in one place, and contact support in another. Think with Google's Omnichannel Index 2024 found that 71% of consumers expect companies to understand their preferences across all of those touchpoints.

This is where a CDP built into a CRM really shines, because your data lives in the same platform that orchestrates your cross-channel marketing and customer service. When data from in-store purchase events, ecommerce behavior, and service interactions shows up in the same customer profile, your team can:

• Trigger the right follow-up based on what actually happened. If a customer abandons their cart and then buys in-store on Saturday, your CDP updates their profile in real time, which means the cart abandonment email scheduled for Sunday doesn't go out.
• Coordinate across channels without doubling up. When the same customer exists as multiple profiles (one for ecommerce, one for in-store), your paid ad retargeting doesn't know they already converted. A CDP merges those profiles, so you stop spending money re-acquiring customers you already have.
• Route campaigns through the channel each customer actually uses. Some shoppers browse on mobile and buy in-store. Others are DTC-only. A CDP that unifies POS, ecommerce, and app data can tell the difference and reach each customer where they're most likely to respond, rather than defaulting to the same channel for everyone.

Helen of Troy, a publicly-traded company composed of 15 major brands ranging from home and outdoor giants to leaders in the beauty and wellness space, uses a customer data platform to store data and share it across email, SMS, and paid channels.

Now, their marketing team can build email and hybrid flows with ease, and they use integrations with Facebook, Google, and TikTok to build lookalike audiences to target while excluding current email and SMS subscribers from paid acquisition campaigns. Consolidating their tech stack contributed to a 40%+ reduction in total cost of ownership and saves Helen of Troy hundreds of IT tickets per year.

Choosing the right CDP for your retail business requires you to understand how it’ll connect your data to the work your team actually does every day.

Here are 4 questions worth asking any CDP vendor before you commit.

1. Does it activate data, or just store it? A CDP that can segment customers but requires a data engineer to act on those segments isn't solving the problem. Look for a platform where marketers can build flows, run campaigns, and test audiences without submitting a ticket.
2. Is it built for retail data volumes and velocity? Retail generates high transaction volumes and real-time behavioral signals. Your CDP needs to process those events as they happen, not hours later.
3. Does it connect to the tools your team already uses? A CDP that requires custom integrations for your ecommerce platform, POS system, or ad channels complicates the same problem it was meant to solve. Look for pre-built connectors to the tools already in your stack.
4. Can it handle your busiest days? BFCM is the stress test any retail CDP has to pass. If a vendor can't show you a track record of uptime and performance during peak traffic, that's a risk worth taking seriously.

Klaviyo Data Platform (KDP) is built directly into Klaviyo B2C CRM, which means the data collected in Klaviyo stays in Klaviyo. Because KDP is native to the same CRM that houses Klaviyo Marketing, Klaviyo Service, and Klaviyo Analytics, your team can segment, automate, and act on customer data without syncing anything or waiting on engineering.

With KDP, you get:

• Seamless set-up: Connect your data faster with 350+ pre-built integrations.
• Single source of truth: Marketing, customer service, and analytics teams get a shared, real-time customer view with lifetime data retention.

Effortless activation: Take action on your data immediately in segments, flows, and support conversations. No syncing or extra tools required.