Over the course of this year, the underlying infrastructure of ecommerce personalisation is going to change. With the phase-out of third-party cookies, brands and retailers will have to find new ways to gather and leverage data for personalising the customer experience. It’s a tricky line to walk because most online shoppers (66%) have come to expect a tailored experience that caters to their unique needs and expectations, yet they also want privacy and control over their data online.
In this guest blog, the leading Product Discovery Platform, Syte will explain why third-party cookies are on the way out and what you can do to combat the personalisation-privacy paradox. It’s the start of a new era in ecommerce personalisation, but with the right strategies in place, you can still provide a highly customised user experience that respects your shoppers’ privacy and all the relevant regulations.
The demise of third-party cookies
For almost three decades, third-party cookies have been one of the most popular ways for ad companies to track user activity across websites. These cookies identify which sites you go to and what you look at – and then that data is used to build a user profile based on your activity and interests. It’s a system that enables highly personalised ads and product recommendations, which can be useful but not always welcome. And that’s why change is coming.
In recent years, a growing number of web users have expressed concern over how their data is being used. They want transparency and choice when it comes to data privacy and their governments are listening. In the EU, for example, a new framework for data protection came into effect in 2018 under the General Data Protection Regulation (GDPR). In Canada, the Digital Privacy Act was added to the federal privacy law (PIPEDA) in 2015. The US doesn’t have a federal equivalent of the GDPR or PIPEDA, but individual states have put regulations in place, such as the California Consumer Protection Act (CCPA), which came into effect in 2020.
As a result, several web browsers — like Firefox and Safari — have already blocked third-party cookies from collecting unauthorised personal data. Google Chrome, the browser with the largest market share, will follow suit early in 2023.
The personalisation-privacy paradox
With traditional, cookie-based personalisation on the way out and emerging laws on data protection and privacy on the rise, ecommerce brands and retailers must carefully navigate the personalisation-privacy paradox. They’ll need to abide by global regulations while also meeting customer expectations and gaining consumer trust.
Thankfully, the customer outlook is evolving too. According to Accenture, 83% of consumers are willing to share personal data to enable a high level of personalisation if a company is transparent about how it will be used. This has led many businesses to embrace transparency as part of their brand and to come up with less intrusive, privacy-first alternatives for data collection.
Data collection strategies to future-proof your ecommerce business
When it comes to ecommerce personalisation, there are other sources of data, especially in product information and direct customer engagement, that can allow brands and retailers to learn much more about their shoppers’ preferences and site interactions without compromising on privacy.
With the following approaches to personalisation, your brand can achieve revenue targets and consumer trust while also future-proofing your business by not relying on third-party cookies for critical data.
1. Pivot from people to products by focusing on metadata instead of demographics
Traditional cookie-based user profiles can pull sensitive information like a shopper’s name and email address, as well as demographic data such as their location, age, and gender. This information can be helpful for generic segmentation, but it tells us nothing about individual tastes, styles, or preferences. For example, a brand or retailer could create an advertising campaign that targets 30-year-old women in San Diego with the most popular products purchased by women in that segment. But those products might be completely irrelevant to many of the women on that list, and some of the recipients might even be upset that they were targeted in the first place.
Instead of relying on invasive or generic data collection, brands and retailers that want to provide a truly personalised customer experience should shift their focus to the actual products that shoppers are looking at – not the shoppers themselves. For example, if a shopper is looking at brown suede mini-skirts with a back zipper closure, you can use visual AI to understand those design elements and provide hyper-relevant and dynamic product recommendations that match their live session data while the shopper remains anonymous.
How does it work? Visual AI scans your brand inventory, identifies each item down to the minute visual attributes, and assigns meta-tags accordingly. These meta-tags can then feed a whole new set of data into your personalisation engine that digs deeper than the SKU level – you’ll be able to see not only the types of products that a shopper is interested in but specific product details that they prefer. This enables brands and retailers to surface the most relevant, conversion-oriented products in recommendation carousels and even search results – something that traditional, segment-based personalisation could never do.
Key takeaway: Modern, privacy-first personalisation is rooted in product metadata instead of common personal identifiers like age, gender, or location. Using this approach allows brands to provide timely, context-sensitive, and individualised suggestions that don’t cross the line when it comes to personal data.
2. Offer direct engagement opportunities to build your zero-party data bank
As we mentioned earlier, many consumers are willing to share personal data if brands and retailers are transparent about how it will be used. For example, if shoppers know that answering a few questions on your website will provide a more personalised customer experience, many of them will voluntarily give you information.
This type of data collection is called zero-party data, and it is extremely valuable for ecommerce personalisation. There are various ways to collect zero-party data. You can introduce virtual experiences, online surveys, personalised forms, gaming content, attractive sign-up offers for loyalty programs, and client services.
By ramping up on valuable shopping experiences and consumer engagement opportunities, you can increase your treasure chest of privacy-friendly insights from zero-party data. In fact, according to McKinsey, 11% of fashion executives are looking at consumer engagement as an important opportunity for brand differentiation in 2022. These interactions help you create memorable experiences that can then be used to personalise numerous touchpoints along the shopping journey — both online and offline.
It’s important to note that a successful zero-party data collection strategy must be secure. Brands and retailers should be able to prove that they can use customer data responsibly with strong data protection controls in place to prevent fraudulent access to this valuable information.
Key takeaway: When it comes to zero-party data collection, it’s not just about transparency – security is top of mind too. The goal here is to make your customers comfortable enough to freely share their information, knowing that in exchange, their data will be safely used to provide the most optimal shopping experience on your site (and your site only).
Ushering in the new age of ecommerce personalisation
Personalisation remains the goal and one of the top ways to differentiate your ecommerce business from thousands of other options, so it’s critical to use this time at the beginning of 2022 to make sure your brand is prepared to deliver truly customised shopping journeys even when third-party cookies become extinct and personal information is unknown.
Ultimately, adapting and implementing innovative strategies that replace traditional, invasive techniques for data collection will spell out the difference between success and failure in the new era of ecommerce personalisation.
Your ecommerce personalisation experts
If you want to find out more about how to integrate Syte on to your Shopify Plus store or would like more information on navigating your way through this new era in ecommerce personalisation, get in touch with our ecommerce experts today.
Syte is the world’s first Product Discovery Platform for retail, powered by visual AI. Syte’s solutions include visual and text search, automated product tagging, personalized recommendation carousels, and more. They use unique data generated by visual AI to help shoppers find the most relevant products, driving conversion and loyalty. To learn more, visit their website.