The Value of First-Party Data: Navigating eCommerce Success Without Third-Party Cookies

Customer data is key for ecommerce businesses to build successful marketing campaigns that lead to conversions. But how should this data be collected, and why is it so valuable?

What is First-Party Data?

One of the best ways that ecommerce businesses can collect data that will enrich their marketing efforts is through first-party data. First-party data is anything that your business collects within your customer ecosystem. Every interaction that a customer has with your ecommerce business generates data – this includes email conversations, browsing habits, engagement with social media, purchasing history, cart abandonment and more. First-party data is classed as anything that is collected directly from users and customers. 

First-Party Data vs. Third-Party Data

While first-party data is collected directly by the business from its users, third-party data is collected by a separate data provider or platform that has no direct link to your business or customers. Many ecommerce businesses lean on third-party data for the majority of their customer data as it can yield more participants and responses, especially as first-party data can be harder to come by with users becoming more reluctant to share personal information online. However, the data gleaned from third-party sources is often lower-quality and less useful to your business. 

Waving Goodbye to Third-Party Cookies

According to research conducted by Adobe Experience Cloud, “Across the UK, 70% of marketing and CX leaders still rely heavily on third-party cookies”. However, with these cookies finally being phased out by Apple and Google on their Safari and Chrome browsers in 2024, ecommerce businesses will have to bring their focus back to first-party data as the accuracy and reliability of third-party data declines.  

So, how could the sunsetting of third-party cookies affect the way your ecommerce business collects and uses data? Businesses that rely mainly on third-party cookies will see a massive loss of data, with strategies like retargeting campaigns and behavioural targeting being impacted.

But, why the change?

Online Privacy Concerns

Although the end of cookies poses possible issues for ecommerce businesses, it’s a welcome change for those concerned about online privacy. Deloitte’s Cookie Benchmark Study found that 65% of internet users have concerns about how their data privacy is affected by online tracking. Internet users are specifically hesitant about sharing their personal information with big tech companies, with this survey showing that only 7.5% of people trust Google with their data.

Changes to Regulations

In addition to concerns about online privacy, data protection legislations have put restrictions on how third-party data is moderated. These include the General Data Protection Regulation (GDPR) passed by the European Union (EU) and the California Consumer Privacy Act of 2018 (CCPA) passed by the state of California. These regulations make it mandatory for businesses to get consent from users before collecting, storing and selling personal data, with harsh penalties in place for those that don’t comply. This has meant that many browser vendors have had to disable third-party cookies in order to adhere to these new regulations and avoid sanctions. 

The Value of First-Party Data

If your business is concerned about the loss of third-party cookies and the shift to first-party data, let’s look at the benefits of leveraging the latter. 

Understanding Customer Behaviour

First-party data is the voice of the consumer. There’s no better way to fully understand your customer’s behaviour, motivations and needs than getting it directly from them. By gaining insight into your customers’ behaviour at multiple touch points, businesses are able to tailor campaigns to fit their needs and expectations. 

Providing a Personalised Experience

As first-party data allows businesses to get a detailed and trustworthy picture of their consumers’ needs, personalised shopping experiences become easier to provide. This can be achieved in a number of ways, for example segmenting users into groups based on behavioural data and personal details in order to provide a personalised experience for each type of customer. With hyper-personalisation not only being favoured, but expected by online shoppers, your business will need to provide this at every step of the sales funnel in order to keep up with competitors. 

Consent-Based Marketing

With the need for more consent-based marketing (marketing that the user has opted-into), your ecommerce business won’t be wasting money and effort on targeting uninterested leads. Instead, ads targeting already warm leads are more likely to generate conversions. Also, customers are more willing to divulge information to trusted brands that use permission-based marketing. 

Here’s some examples of consent-based marketing that your business can leverage in lieu of third-party data:

• • SMS and Email Marketing: Give customers the option to provide their email and phone numbers to sign up to your marketing – this way, you know your marketing content is only going to those who’ve agreed to see it. 
  • Chatbots: Leveraging AI through Chatbots is a great way to initiate communication and confirm that the user is interested in receiving messages to enrich their shopping experience. 
  • Web push notifications: These notifications allow your business to seek consent before accessing user information, giving customers the option and power to decline if they wish. 

How to Collect First-Party Data

The best way to collect, store and distribute first-party data efficiently is through a customer data platform. Here at 5874, we support integrations with our partner Feedonomics to ensure our clients get the most out of their data. Feedonomics provides ecommerce businesses with data integration services, meaning customer data can be easily imported and exported between multiple platforms seamlessly. 

Feedonomics also allows businesses to turn their customer data into actionable insights with their AI-driven analytics and reporting. These tools make it easy to make sense of the data –  identifying trends, patterns and correlations that provide a clear picture of your customer’s behaviour and preferences. With this information clearly presented, you can focus on turning the data into results. 

Still relying on third-party data from cookies? Contact 5874 Commerce here to find out how we can help you make the shift to solid, reliable first-party data that ensures your customer’s voice is being heard.