From here on out, any eCommerce marketing strategy that relies on third party cookies will see regular declines in performance and a long term hit to revenue.
The death of the third party cookie has arrived, and that means marketers can no longer depend on this data to increase reach and support personalization on paid media channels like Google and Facebook (even though Google did give brands a reprieve of another year to prepare). Ultimately, any retailers that do continue with the status quo can expect decreases in eCommerce revenue as a result.
Fortunately, there is a way forward, and it starts with first party data.
First Party Data Will Drive the Future of eCommerce Marketing
Going forward, all retailers need a strategy to own first party data and collect more customer identities. The marketing teams that can successfully activate first party data and democratize access to it across the organization will be well-positioned to drive retention, increase customer lifetime value and grow eCommerce revenue — even exceeding what was possible with third party cookies.
Specifically, a strong strategy centered around first party data can:
- Improve identification up to 5x
- Increase personalization across owned and earned channels
- Grow eCommerce revenue and customer lifetime value by driving first and repeat purchases
- Enable a future-proofed shopper data and personalization strategy
Establishing A New Approach to Customer Retention
The death of the third party cookie puts an unprecedented level of responsibility for driving revenue on owned channels like email and the eCommerce site. But with the right first party data strategy, marketing teams can make use of a variety of channels to improve customer retention and increase revenue as a result.
Focusing on customer retention — driving continued repeat purchases from existing customers and even increasing the value and frequency of those purchases — is so important because 70% of a typical retailer’s future revenue sits with already active customers. However, active customers only comprise a small portion of a retailer’s total audience (compared to non buyers, lost and at-risk customers), and nearly 74% of those active customers are one-time buyers — who are notoriously hard to convert.
So what does it take to ensure you capture and even grow this revenue potential by prioritizing customer retention strategies? Here’s a look at what you need to know.
1) Develop a strategy to own first party data
First and foremost, your marketing team must have a strategy in place to collect first party data. This should include:
- Clearly defining shopper identities: Take the time to understand how your team will collect first party data, such as the types of data you can collect, whose data you can collect and how you’ll have access to it. Ideally, you want a solution that can identify all site traffic (not just logged in customers) and retroactively apply each shopper’s full history from the moment they land on the site once it can make that identification.
- Applying integration best practices for shopper identification: With the right integration practices in place, you should be able to identify up to 70% of all anonymous site traffic with first party cookies. These practices should center around email appends, customer logins and newsletter signups, to name a few examples.
2) Introduce solutions to drive traffic — and first party data collection
Once you have the foundation of how you’ll identify customers in place, then you can start applying strategies to drive high quality traffic to your site to fill the shopper funnel.
These solutions might start on advertising channels with targeted campaigns designed to bring new and existing customers onto the eCommerce site. From there, you can layer in your first party data collection strategy to start identifying anonymous site visitors through tools like onsite popups, email captures and enriching shopper profiles.
3) Activate first party data to drive lifetime value and eCommerce revenue
Next it’s time to start activating all of that data. The best way to do so is by tapping into predictive intelligence integrated into your shopper profiles that can help drive highly individualized outreach for each shopper based on factors like product interests, channel preferences and even timing considerations. Consider this flow:
- A shopper lands on your site after seeing an ad powered by lookalike audiences using a predictive lifetime value model. This means you know they are a high value shopper right off the bat.
- As soon as they start browsing, your tech stack automatically creates a shopper profile and begins analyzing their behavior to start making predictions on what they may like.
- At the same time, there are a suite of tools available to help identify the shopper. In this case, they fill out a lead capture form onsite, and once this happens all of their previous onsite behaviors and related predictions from your system get retroactively applied to their email address or phone number.
- Based on all of that, the AI workflows can kick in to prioritize the best message to send to the shopper, where to send it and when to send it to drive continued, high quality traffic to your site.
- After the shopper comes back to the site, you can tap the same set of predictive tools to optimize the onsite experience (for example through dynamic product recommendations and targeted offers onsite) to get that shopper to purchase.
4) Introduce first party data on paid channels to retain reach
It’s also important to think through how you can retain reach in paid media channels even without third party cookies (which make up the majority of data used on those platforms today). The key to doing so is to sync audiences built using first party data to platforms like Google and Facebook to help identify high value shoppers.
For acquisition, that means profitably acquiring customers by powering lookalike models with high quality seed lists.
For retention, that means using the data you have on your shoppers to identify high value first-time purchasers that you can target to make that all-important second purchase (which serves as the gateway to ongoing loyalty and lifetime value).
5) Empower teams across the business with access to first party data
Finally, it’s important to empower revenue-generating teams outside of marketing by providing them with easy access to first party data. Specifically, using the combination of shopper and product data can help teams like merchandising better understand customer interests to make more informed decisions.
Successfully democratizing access to this data requires the ability to grant permissions to different internal teams, agencies and partners in a highly flexible way so that you can empower them with the necessary information without compromising security.
Reimagine Your Retention Strategy with First Party Data
A strong retention strategy is critical to every retailer’s continued growth. The impending demise of the third party cookie will no doubt have an enormous impact on how many retailers have typically approached retention. This is why the most forward-thinking marketing teams are reimagining their strategies with first party data, and if your team hasn’t started doing this already, the time to do so is now.
Interested in learning more about what it takes? Click here to schedule time to speak with us and discover how you can empower your team to take advantage of this new era of commerce.