Technology has been woven into the fabric of our daily lives, with consumers banking, communicating and shopping online. However, the convenience of e-commerce can come at an expense. As consumers have moved deeper toward a digital-first world, questions and concerns about data privacy have grown exponentially.
Under increasing pressure, Google recently announced that it will be ending its usage of third-party cookies and app tracking in the Chrome browser. For many e-commerce sites, losing access to third-party data cuts off a major resource for customer marketing and retention.
This new obstacle arrives at a crucial time for many e-commerce brands, as the industry is undergoing tremendous growth. Global e-commerce sales increased by 50 percent during the pandemic and are expected to continue to grow. It’s clear that global consumer shopping habits have permanently changed, with customers now expecting a personalized experience when they shop online, something that has very much become the norm with more access to consumer data. However, Google’s decision reflects an understanding that consumer privacy is a top consideration for the public, and many other owners of third-party data may be soon to follow. This leaves only one option for many businesses: capturing and capitalizing on their own first-party data.
As first-party data becomes king, there are three key considerations for e-commerce businesses:
Utilize Existing Owned Data
Many e-commerce businesses don't have the resources or capabilities to utilize the wealth of information that they already own. First-party data has always been viewed as the “holy grail” of consumer insight, but it can be difficult — and costly — to properly synthesize into something actionable. By making an investment in obtaining more of this data through websites and customer feedback, small and midsized businesses (SMBs) can gather more valuable information and prepare for a post-cookie world. From site visits to bounce rates, much of the data needed to prospect and retain customers is already on-hand. Learning how to take full advantage of this data can help businesses build an even stronger brand by creating a sustainable and internal channel for growth. However, to capitalize on this, being able to pull key insights from the data is crucial, and many businesses are looking toward intelligent technology for help.
AI and ML Applications
While the appeal of third-party data is convenience and breadth, as businesses look for more ways to innovate, first-party data provides a unique opportunity to connect with customers. By inputting it into powerful artificial intelligence (AI)/machine learning (ML) models, businesses can understand their customers better and identify consumer trends faster.
Build Loyalty With Established Customers
Rather than spending money and time marketing to a disinterested audience, relying on first-party data allows SMBs to build robust relationships with an established customer base. Many businesses used third-party data due to the volume of potential customers and ease of access. However, the modern e-commerce brand must not only consider how many customers they’re reaching, but the quality of those customers. Fostering long-term, sustainable relationships between your brand and established customers is an important avenue for organic growth. By taking action to implement a more personalized shopping experience, businesses can expect to see more returning customers and, in turn, more revenue.
The new consumer marketing landscape can be intimidating for new and established e-commerce brands. But this evolution is critical to building a sustainable business. The ability to adapt quickly to change and create highly personalized shopping experiences are what makes e-commerce a key selling channel for brands.
Now is the time to futureproof brands and build a modern, customer-centric e-commerce experience.
Chris Litster is CEO of Dianthus Commerce, an AI-first e-commerce company that buys, builds and boosts direct-to-consumer brands in the pet, outdoor/active life, home and beauty categories.