Why the Impending Death of Third-Party Data Isn’t All Bad
On one side of the coin, it couldn’t be a worse time for internet giants, Firefox, Safari and Google to begin their journeys to the eventual block third-party cookies.
The “death” of third-party data is making waves across industries, acting as a catalyst for consumer-first change. Even though Google recently announced that this change will not be in effect until 2023, retailers looking to get ahead of ongoing customer-first data privacy practices need to act now or risk causing disruptions to some of the most critical parts of their customers’ digital experiences.
While understanding customers is crucial for any business, this is especially true for retailers in today’s digital-first world. It’s imperative that each and every interaction with a current or future customer is carefully curated. In fact, recent research from PwC demonstrates that one-third of customers who have just one bad experience will break up with a brand.
Entering the summer of the “revenge” economy, stakes have never been higher for retailers looking to capitalize on the projected $1.7 trillion that Americans have saved over the course of the pandemic.
On one side of the coin, it couldn’t be a worse time for internet giants, Firefox, Safari and Google to begin their journeys to the eventual block third-party cookies. On the other side, this change will require brands to be much more thoughtful in their approach to better understanding customers. If done correctly, this shift will make a world of difference for retailers that are likely struggling to make noise in today’s highly competitive marketplace.
Despite the fact that the death of third-party data is projected to adversely impact retailers’ ability to deliver targeted and personalized experiences, this shift poses a huge opportunity for brands to understand their customers in a way they haven’t been able to before.
With fewer than 40% of businesses collecting or using primary targeting data effectively, or at all, to guide customer personalization, the overwhelming majority of businesses haven’t yet tapped into the potential that first-party data brings to the table. Presenting a window of opportunity to seize market share and customer loyalty, retailers must evolve their data collection processes or get left behind.
Content is Key
With so many methods in collecting customer data, it’s shocking that most companies have not approached filling the critical gap in understanding customers via the content they are engaging with. In fact, recent Optimizely data showed that more than half of Gen Z finds inspiration on TikTok, Instagram or Facebook, in that order when shopping.
Businesses should be looking first and foremost at the content customers are engaging with because it tells a story about what resonates with them, paving the way for companies to compliantly and immediately stitch together a customer profile. With less and less customer data at our disposal, retailers need to be personalizing digital customer experiences based on the behavior behind content consumption, even in the case that the visitor is unknown.
One Size Rarely Fits All
First-party data is essential for retailers to unlock their digital potential. Ideally, retailers should be personalizing digital experiences from the first time customers engage with their brand to build up their own proprietary customer data.
It’s important to remember that customers build relationships with brands and companies. As with any healthy relationship, time spent together is critical. Retailers should focus on nurturing their customer relationships by providing easy and ample opportunities for them to interact with your company and brand. By doing so, retailers can pave the way for a deeper understanding of customer values, perspectives and needs driving them to your product.
All in all, there are plenty of ways that organizations can be supplementing for the loss third-party data ahead of its demise. From maximizing interactions with customers, to keeping a close eye on the content they are engaging with, retailers have many avenues to better understand their customers in this increasingly regulated landscape.
Today’s most tech-savvy retailers are not only leveraging data — they’re completely data-obsessed. Not only that, but they’re investing into innovative technology to collect and unlock the power of this data.