When Google announced it was to delay its plan to block third-party cookies from Chrome until 2023, marketers shared a sigh of relief, and you can’t blame them. Over the last few years, the data protection requirements put in place first by regulators, and later enhanced by browser providers, have forced many retailers to completely rethink the way they both acquire and use customer data. 

But the root of this shift doesn’t lie with the regulators. According to Salesforce, nearly 48% of customers actively avoid certain companies because of data privacy concerns, and 63% feel businesses aren’t transparent enough about how customer data is being used. With or without Google’s decision, it is now vital that retailers listen to their privacy-conscious consumers and begin to embrace a cookie-less future.

In this article, I’ll shine the light on the positive aspect of zero-party data for retailers and explain why this shift can be your competitive advantage.

Embracing zero-party data

An illustration shows a computer where the customer data is gathered.

Whilst the move away from third-party cookies could be considered a restrictive measure, the growing customer desire for a transparent and trusting relationship with brands gives retailers an unmissable opportunity. Zero-party data is this huge chance – information that customers freely and intentionally share with a business to communicate their preferences, purchase intentions, and needs for recognition. 

Unlike third, second, or even first-party data, zero-party data relies on explicit, rather than implied customer information. Where first-party data is derived from web analytics, social, CRM and more, zero-party data is gained through proactive customer engagement. Even more importantly, first-party data only delivers insights based on past behaviour and zero-party data allows brands to understand a consumer’s current and future preferences

For example, a consumer in a search for a laptop might have considered only gaming ones in the past. However, a new job or lifestyle choice can easily alter the initial search. The current priorities and preferences could shift for a multitude of reasons over time, and if marketers and retailers want to keep track of those changes, they need zero-party data.

The value of shared information

If the pandemic has taught us anything, it’s that online services need to be as good as the in-store customer experience. Ecommerce growth saw its biggest increase in over a decade last year, and customer expectations expanded with it. 

An illustration shows two people sharing information about their buying preferences.

In spite of data collection concerns, recent research from Accenture found that 87% of customers still want to purchase from brands and retailers that “understand the real me”. Privacy and personalisation can no longer be mutually exclusive, and it’s up to retailers to acquire and apply individual customer preferences to a particular customer experience, without sacrificing trust or transparency.

Zero-party data strategies are the only way to walk this tightrope. Based on the honest and open exchange of information, consumers can come to expect something in return for going through a registration process, taking part in a questionnaire, or voting on a Twitter poll. However, customers choose to share their zero-party data – through registration systems, questionnaires, surveys, or quizzes – it’s the simple fact of choosing that makes all the difference. 

Today, three in four customers (73%) are willing to share more personal information if brands are transparent about how it is used. Personalised offers and recommendations, and ultimately an improved user experience are attractive incentives for revealing your favourite shirt style or coffee flavour. The initial benefits for consumers are obvious, and once that first information exchange has taken place, ongoing brand loyalty can be just a few steps away. 

The competitive advantage of direct data

For retailers, the overarching and invaluable benefit of receiving data directly from the customers themselves, rather than having to infer preferences through behaviour, is in removing the guesswork. 

An illustration shows an exchange between a buyer and a customer based on zero-party data gathered online.

Zero-party provides much higher data quality and accuracy than other forms of data collection, which allows businesses to build a clearer understanding of their customer base and its desires and expectations It also empowers brands to deliver the all-important personalised experience, build a stronger relationship with customers and gain a competitive advantage over rivals relying on other outdated data strategies. 

Because of its greater reliability and precision, zero-party data can also be much more cost-efficient than other types of data. In obtaining accurate customer information first-hand, marketers can devise effective personalised campaigns in real-time, rather than wasting money on trial-and-error strategies based on inferred or assumed preferences. Campaigns are immediately more relevant and applied more accurately than those driven by first-party data strategies. 

For consumers and retailers alike, new relationships built on zero-party data, trust and transparency are an exciting opportunity. Whether marketers like it or not, the cookie-less future is coming. If they are to remain relevant to today’s consumers, it’s a future they must embrace. 

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