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With a number of huge privacy-related changes sweeping the internet, data privacy is a hot topic right now.
Both Google and Apple have announced plans to phase out third party cookies, and the EU General Data Protection Regulation (GDPR) has turned privacy into a major concern for consumers. According to a recent study by the World Economic Forum, the number of people who worry about data privacy has doubled in the past two years.
As more countries follow suit with similar legislation, it’s essential retailers adopt a privacy first strategy to prepare for the future.
In this article, we’ll look at three key ways data privacy is reshaping eCommerce, and discuss how marketers and retailers can adapt.
1. Customers want privacy first solutions
Over the past decade, a number of stories about data breaches at big technology companies have broken in the news.
As awareness of data collection, tracking and storage methods by companies has grown, consumers have demanded better protection and security of their personally identifiable information (PII).
The Economist Intelligence Unit reports that 93% of users name privacy and security of personal data a top concern.
Big tech have taken note, with browsers such as Safari, Mozilla Firefox and Google phasing out third party cookies. Companies such as Apple are also giving customers greater control over their privacy settings with the option to prevent apps and websites from tracking them on IoT devices.
What does this mean for marketers?
Cookie based ad targeting is out, which means an end to those advertisements that seem to follow you around the internet.
Marketers will also have access to less third party data, meaning they’ll have fewer insights about the performance of campaigns across the digital ecosystem.
2. Personalization is here to stay, but not ‘as is’
Striking the right balance between personalization and privacy has been a challenge for marketers. As consumers opt out of being tracked, unsubscribe from mailing lists and block unwanted texts, retailers and brands need to rethink the ways they engage their customers.
Personalization at scale is more than just a trending topic, it’s the future of eCommerce and digital marketing - but there’s a clear difference between receiving a personalized email and receiving a personalized product recommendation that delivers exactly what you’re looking for.
Using first party data to its full potential is the key to success in a third party cookieless world, and fortunately, every retailer has access to a rich first party data set on their own site: item and clickstream data.
This data can be used to more deeply understand the relationship between items and customer journeys, and savvy retailers are using it to optimize customer experiences (CX) without needing to collect PII.
3. The rise of contextual advertising
Contextual advertising is one of the most important trends in the digital advertising industry right now, and one of the best examples of this trend is Retail Media.
In the words of Particular Audience Founder and CEO James Taylor:
“Retail Media is the biggest opportunity for retailers since eCommerce.”
BCG think so too, naming Retail Media a “$100 billion media opportunity for retailers”. Amazon is already leveraging the power of Retail Media - in 2021, they generated $31.2 billion in revenue from this arm of their business alone.
Companies like Particular Audience make Amazon’s pay-to-play model of contextually relevant sponsored products and Retail Media available to all retailers.
Retail Media allows a brand to spend ad dollars on placement of a product on a retailer’s website to engage with customers who have high purchase intent, putting the right product in front of the right customer at the right time.
As brands seek innovative ways to market to consumers, this type of contextual advertising is powerful for marketers pivoting away from third party cookie enabled targeting, and actually drives better customer experiences and loyalty. It also creates a high margin incremental revenue stream for retailers looking to monetize their sites beyond item sales, making Retail Media the ultimate win-win-win.
The death of third party cookies presents a tremendous opportunity for retailers who are prepared for this new reality. By building solutions with product data, not customer data, deploying relevant, contextually aware recommendations and leveraging the power of Retail Media, marketers and retailers can transform the shopping experience of their customers and boost revenue, all while protecting personal data.