Insights
Why Retailers Should Focus on First-Party Data
To gain valuable insights from customer data, retailers shouldn’t overlook the potential of 1PD
- Article
- 8 MIN READ
- Jul 15, 2024
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Evan SituHead of Data
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Andy SharpTechnical Director
Summary
This article was updated with new information on July 25, 2024.
In July, Google shocked the world by announcing that it would not be phasing out the use of third-party tracking cookies on the Chrome browser, as had been widely expected. Back in 2020, Google announced its intention to stop supporting third-party cookies without giving a precise date for the change. Now, after pushback from advertisers, Google has decided to keep the cookie alive.
While marketers will no doubt breathe a sigh of relief at hearing this news, the reality is that third-party cookies are still an endangered species: Apple’s Safari browser actively blocks third-party cookies, and tracking cookies are blocked by default on Mozilla’s Firefox browser. Google Chrome may command a significant share of the total browser market, but while third-party cookies have gotten a reprieve from Google for now, there’s no telling when the tech giant may reverse course (again) and disallow them for good.
One thing is certain: the tumult around third-party cookies has raised several important issues that retailers should keep in mind moving forward. Most salient of these is how leveraging first-party data, rather than relying solely on cookies, can provide a rich source of customer insights while also offering some protection in the event of deprecation of third-party cookies in the future.
In this article, we’ll explore the benefits retailers stand to reap from adopting first-party data collection and touch on some of the challenges associated with solely relying on third-party cookies.
The changing world of data collection
As noted above, major web browsers including Safari and Firefox have already implemented stricter privacy settings by default to stop third-party tracking. As a result, the volume and quality of analytics data available to be collected through Safari has dropped significantly in the past year. (Before the recent decision to keep third-party tracking alive — for now — Google had already clamped down on data collection for 1% of users of the company’s Chrome browser, in an experiment to see how the end of the tracking cookie would play out on Chrome.)
For retailers, the most significant impact of changes to browser data collection is illustrated by the loss of the ability to track spend via channel attribution.
Specific areas of impact for retailers
The increasing scarcity of third-party browser cookies is making it challenging for retailers to understand how customers behave across the web. Without rich data to provide insights about customers’ purchase history, preferences, and website engagement, retailers struggle to:
Attribute spend. Automated campaign attribution tools are unable to accurately measure ROAS and marketing campaign effectiveness without in-depth customer data.
Target advertisements. Precise ad and promotion targeting, previously based on detailed user profiles, is becoming increasingly difficult.
Extract high-quality data. Gathering first-party data requires customers to willingly share their information, which can sometimes act as a barrier to robust data collection.
Unlock data potential. Even with good data collection, extracting value from the data requires a robust customer data platform (CDP) and marketing automation tools.
Moving from third-party to first-party data collection
Thankfully, there are effective solutions that can be deployed to fill the data gap. The most practical and impactful of these solutions involves shifting to first-party data collection.
First-party data is information about customer behaviour collected directly from retailers’ owned channels, including their website, app, or other digital properties. While this data may not be as robust as detailed third-party data, it can provide an essential window into how customers engage with your brand.
Beyond the data itself, collecting first-party data provides an opportunity to build trust with users through transparency. In a time when concerns about data privacy are at an all-time high, this trust-building is essential to fostering long-term customer loyalty.
Additional benefits
One often-overlooked fringe benefit of fewer third-party cookies is the potential for improved website performance. Third-party tracking tags can significantly increase page load times, which in turn can negatively impact a website’s SEO ranking and reduce organic traffic visits. It’s also well-established that page load delays of just a few seconds can cause users to leave your site — and in many cases, never return.
(On a related note, Javascript tags — sometimes used in tracking — also contain code of unknown provenance, each instance of which presents a potential security risk. With the multitude of threats present online today, any chance to improve one’s security profile should be embraced.)
The slow deprecation of third-party tracking presents retailers with an opportunity for reflection. Rather than pursuing quick fixes to fill data collection gaps, retailers should consider revisiting how they use data analytics and where their approach to product optimization could be improved. Are there particular areas where deeper insights could be valuable? Are there opportunities to implement modern tools and practices which were not in use before? These questions are worth asking.
Finally, third-party cookies introduce significant privacy concerns. They track user behavior across multiple sites, often without explicit consent, leading to potential violations of user privacy. The approaching end of the cookie era aligns with growing regulatory demands for stronger data protection, privacy standards, and enhancing user trust and compliance.
Transitioning to a first-party data solution
When it’s time to plan your strategy to transition to first-party data collection, a digital solutions partner can tailor the process to your specific needs. Some important areas to cover include:
Clearly articulating the organizational strategy for moving to first-party data collection
Analyzing the landscape to identify opportunities to improve data collection practices
Introducing server-side tagging and analytics tracking infrastructure
Updating or rebuilding dashboards and reports to incorporate changes
Aligning with downstream services to ensure end-to-end process alignment
Prepare for testing new solutions vs. old to compare results
These critical areas of focus will form the core of your transition to first-party data collection.
Final thoughts
Many retailers are seeking out partners that possess the technical knowledge required to support the transition to a cookieless future. Apply Digital has deep expertise in the areas of first-party data collection and a long track record of creating memorable digital experiences for top global brands. Our experts can help you analyze your data collection analytics practices, and propose solutions to adapt to the end of third-party tracking cookies.
Partner with us
Together, we can deliver innovative solutions and drive your digital change journey.
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