Retailers use and reliance on third-party data is changing due to rules on data collection established by privacy regulations such as GDPR and CCPA. In the coming years, all of the biggest web browsers, from Google Chrome to Safari, will prohibit the use of third-party cookies. This means retailers will have to solely rely on the data they directly collect themselves from customers — i.e., first-party data. So, what does that mean for e-commerce? What exactly is first-party data, and how do you get it?
First-party data is customer information and data that a brand or retailer collects themselves, directly from its audience or customers. This data typically is owned by the brand or retailer, and generally cannot be sold or shared without proper notice, consent and opt-out options. It also normally doesn’t follow users outside of the brand or retailer’s website.
There are two different types of first-party data: declarative data and behavioral data. Declarative data is the data that someone who visits a website divulges, such as their name, email address, location, income, or even something more specific. It’s useful for understanding consumer behavior and finding out what would cause them to want to purchase something.
Behavioral data is data based on the activities of the person who visited the website. This data is often collected using first-party cookies or tracking pixels. This cookie is unique to the brand or retailer’s site and never follows the user across the web. Tools like Google Analytics help analyze this user behavior, revealing helpful information like what parts of a website are up to par and what parts need improvement.
To collect first-party data, you must obtain the consent of the person whose data you want to collect. To get that consent, you must first build their trust, otherwise they won’t volunteer their information. Customer trust is built on transparency. Always explain how you’re going to use the data you collect and how it's being collected in your cookie consent pop-up.
A great way to collect first-party data is by simply asking for reviews from customers. Customer reviews not only improve sales on e-commerce sites, they also provide a great way to gain access to customer data consensually.
Another way is by offering quizzes to customers in exchange for personalized product recommendations, which are becoming more and more requested by consumers. Through these quizzes, you get to learn about shoppers’ likes, dislikes and interests, which in turn helps you to improve their experience and introduce them to products they're more likely to purchase. This tactic increases return on investment and consensually gathers first-party data.
A third way is letting customers create accounts on your e-commerce site. When customers volunteer information through the profiles they create, they're incentivized to return to your e-commerce store. Furthermore, you can also find useful bits of data from their account information.
Once they become repeat customers, you can reward them with a loyalty program. A successful customer loyalty program is a data source that's constantly evolving and updating with every new purchase by a customer. It also helps with sales and brand loyalty.
Lastly, you can ask site visitors to participate in surveys. Not only do customer satisfaction surveys help to improve products and services, they can function as a source of first-party data.
Brands and retailers need to create a first-party data strategy as soon as possible: not only to stay compliant with regulations such as GDPR and CCPA, but because a first-party data strategy creates value internally for a business, improves the quality of customer data, and, ultimately, helps build strong relationships with your customers.
Gracie Renbarger is senior vice president, general counsel at Bazaarvoice, a company that allows brands and retailers to collect and display several types of user-generated content.