Big changes are happening in the world of online sales. Third-party cookies are on the way out, leading to better privacy for online shoppers and website users in general. This is going to raise new challenges and opportunities for companies who trade online, and your business needs to be prepared.
First-party versus third-party Data
Imagine you’re online shopping for shoes. You create a login for the website and place your order. You supply name, address, payment details, and information about what shoes you looked at and what shoes you purchased. There may be the option to provide further information – are you looking for specific shoes? Do you want to sign up to a newsletter? All the information you provide in this way is called first-party data.
Third-party data is collected from your social media profiles. What products you looked at, recommendations you requested on Facebook, recipes you Googled … the list goes on. It’s everything you’re not aware of sharing.
The collection of third-party data has real privacy issues. Even if technically no real person sees that you were Googling casserole recipes, being sent a targeted advert about them does not feel great. The negative reputation of third-party data collection is strong enough to reduce the chances of a customer buying your product, even if an advert is very precisely targeted at them.
Changes to the law around data
The changes are coming from legislation and from business entities, and they are worldwide. In Europe, the General Data Protection Regulation has come into effect, and in America, state-level legislation such as the California Consumer Privacy Act is likely to be joined up with federal laws sooner rather than later.
Meanwhile, Google and Apple, to name just two tech giants, are working against third-party tracking under their own initiative, hoping to be compliant with regulation before it lands. Google have given the deadline of 2022, and as almost all businesses ultimately meet their customers through Google searching, this means the deadline applies also to you.
In a future online marketplace set up to focus on privacy, businesses will no longer be able to rely on Third-Party Data. They will therefore need to make the most of any First-Party Data they can collect.
There are four key points to consider when building a First-Party Data strategy.
1 It’s essential to get email addresses from your customers. This is so you can send advertisements to their email inbox. Classically this happens when a customer signs up to your website to purchase an item, although some online shopping systems don’t require a sign up. You can also acquire email addresses by offering the option to sign up to a regular newsletter.
2 You can also get email addresses, and potentially other data, through the customer’s interactions with your customer service team, whether online by webchat or by phone to your call-centre. Incorporating a request for data into the customer service script can result in you acquiring an email address even if the customer has not bought anything yet. You can also pair this email address with other data collected in the interaction.
3 If you have brick-and-mortar premises, data can be collected here too – staff can attempt to get emails from walk-in customers, and you can use technology to send messages to wireless and Bluetooth devices with adverts and requests for email addresses when customers enter the building. Even if this doesn’t apply to your business, you can book space in a shopping centre or other public place and have a representative present to talk to people as they pass by.
4 The future of data collection is likely to revolve around helpful content the customer gets something out of. Instead of a targeted advert, the customer searches for, say, ‘How to fix leaky roof’, and finds an instructional video made by a hardware supplier – complete with product mentions and the opportunity to click through to the website and join the mailing list/newsletter.
Finally, correct data storage is important. You need to have access to the data so you don’t lose it, and it needs to be organised in such a way as to make it easy to apply to your operations. From the customer’s point of view, they need to be able to trust that you won’t misuse the data or allow it to leak, and serious penalties will apply if this happens.