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How Can a Customer Data Platform (CDP) Benefit Your eCommerce Business?

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How Can a Customer Data Platform (CDP) Benefit Your eCommerce BusinessWhat is a Customer Data Platform?

A customer data platform, or CDP, is a system that collects, unifies, and stores customer data from multiple sources at scale, and makes it available for manipulation and distribution to systems of insight and engagement.


What’s the purpose of a CDP?

A customer data platform serves three purposes:

Collect and unify all first-party data

Many of the systems – such as email, analytics, CRM, eCommerce, and social sites – that marketers use operate in silos and don’t pass data back and forth. It’s hard to get a complete picture, and even harder to analyze what you’re looking at. The purpose of a customer data platform is to eliminate those issues by connecting all the tools that marketers use and acting as a single source of truth for first-party customer data.

Customer data management

CDPs manage first-party data and consumer privacy and data rights by controlling the data flow between different marketing systems and managing consent. This is the world of GDPR and data privacy; your business needs to actively manage, and document that management of, consent and data flows.

Customer data activation

Once you’ve received permission to collect first-party user data and have unified and structured it into profiles, you can then take action on it. CDPs can create audience segments that can be used across the rest of your marketing platforms and channels.


CDP vs. CRM vs. DMP

Since CDPs are sometimes confused with Data Management Platforms (DMPs) and Customer Relationship Management (CRM) solutions, it is good to understand the differences.

Customer Data Platform (CDP)

A customer data platform (CDP) is designed for marketing. It collects and unifies first-party customer data from multiple sources to build a single, coherent, complete view of each customer. It then makes that data available to marketers to create targeted and personalized marketing campaigns.

Data Management Platform (DMP)

A data management platform (DMP) is made for advertising and is specifically focused on supporting web display advertisements. Geared to campaigns designed to gain new customers, a DMP gathers data from cookies. Unlike the data collected and aggregated by CDPs, the data collected by DMPs is often anonymized and retained for a short period of time, usually around 90 days.

Customer Relationship Management Platform (CRM)

A customer relationship management platform (CRM) is a technology product or solution for managing a company’s relationships and interactions with its customers and prospects.


Use Cases and Benefits of Using a CDP for eCommerce Brands

By bringing all types of data (structured, unstructured, online, offline) together for a centralized view, CDPs improve customer experience (CX). They create a constantly updated 360-degree view of the customer from data gathered from every customer touchpoint – email, social media, loyalty programs, and in-store transactions – as well as existing data sitting in other internal systems, such as ERP, CRM, DMP, and more.

Because CDPs collect data directly from your customers, that data is more complete and up-to-date than data from other sources. A comprehensive, up-to-date view of customers makes marketing campaigns more efficient, effective, and unified.

Additionally, getting a clear understanding of your customers’ journeys helps you lay the groundwork for:

A better understanding of customers

  • Customers play a major role in the growth and development of the business. Thus is essential for a business to understand the needs and requirements of its customers to provide them with a better experience.
  • Understanding the customers enables the enterprise to deliver hyper-personalized experiences to them. It also provides deep insights that will drastically impact the revenues. It has the potential for providing real-time data for staying ahead in the competitive business for fulfilling its customers’ needs.

Provide a seamless cross-channel experience

Centralizing the customer data at a single location allows the different teams to access the same data and makes it easier to work in collaboration. This makes it possible to provide a seamless experience across the different channels that are used for engaging their customers.

Provides the 360-degree perfect view of the customer

Implementing the CDP allows the organization to collect all the possible details about their customers thus understanding the behavioral trends, demographics, etc. These details enable the organization to provide a personalized experience to their customers for the growth of their business.

Customer Segmentation

The customer data platform for eCommerce allows for segmentation that provides a personalized user experience. CDP enables segregation of the users based on the different segments based on various factors like demographics, seasons, trends, etc. which helps in keeping the customer engaged.

Personalization using AI

  • The data unification helps in predicting future market trends by analyzing the different sources and drawing patterns based on the users’ past experiences and actions. This will enable the business to get future insight before the customer thinks about it.
  • The better you understand your customers, the better you can be at tailoring the content, messaging, and product recommendations they see. That’s the reason why some CDPs also have built-in personalization engines that can analyze customer data and help marketers deliver personalized experiences at scale.

Increasing the revenue

Customer engagement increases when the enterprise provides them with personalized content. This increases the faith and trust of the customers in the brand and business. This increased customer engagement leads to increased revenue generation. It keeps the customers motivated to make increased purchases by providing advertisements, offers, and discounts.

Decreasing product abandonment

Providing personalized services to the customers leads to increased engagement leading to increased sales. Personalization leads to a decrease in cart abandonment as the product is designed or developed based on the requirements of the customer.

Identify up-sell and cross-sell opportunities

By aggregating and analyzing diverse customer data, including purchase history, preferences, and browsing behavior, a CDP offers a comprehensive understanding of individual customer profiles. This granular insight enables businesses to identify patterns and correlations, unveiling opportunities to suggest complementary products or upgrades.


How does a CDP help Secure Customer Data?

As the data collector, a customer data platform (CDP) streamlines your data platform and centralizes your customer data infrastructure. By eliminating isolated customer data sets, you can surface data quickly if a customer makes inquiries.

In addition, CDPs let you share consent updates and only forward data based on consent attributes, ensuring your business can enforce and abide by data policies and regulatory standards.


How does a CDP help with Data Compliance?

Customer data platforms can improve compliance with existing and emerging data privacy regulations, such as the EU’s General Data Protection Regulation (GDPR) and California’s Consumer Privacy Act. These laws require companies to afford consumers the right to access their data and to have it erased (the “right to be forgotten”). Meeting these requirements can be a burden when different consumer data is siloed across other systems and can be easily overlooked.



One of the biggest decisions you’re going to make is choosing the right CDP for your organization. When you’re choosing your CDP, you can’t pick randomly. You need to find a CDP that works with your specific requirements, has similar use cases, and is experienced working with companies in your industry.

Want to learn more about how to choose the right customer data platform for your organization? Please refer to this blog for more information.

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