Companies and platforms are changing how they capture users’ personal data in response to both a slew of updated regulations and outcry from consumers to have more control over their personal data. Consumer information is used in a variety of ways, such as understanding behaviors and desires, collecting demographic data, and improving the overall customer experience. The vast majority of this data is collected using cookies, which are gathered through the tracking of users who visit their websites and provide analytics into consumer clicks, pages viewed, and other consumer behavior information. As consumer unease increases surrounding the collection and use of their personal data through cookies, it has caused the prioritization of first-party data collection – or collecting data directly from the consumer that is proprietary to the brand.
These concerns also align with the data privacy laws from the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) that enable users to opt-out of the collection of personal data. The challenge for companies, now, is to effectively collect consumer data while maintaining the balance of personalization and privacy for their consumers.
First-Party Data Collection
Google is a goliath when it comes to collecting and leveraging consumers’ data; however, consumer privacy demands have driven Google to completely abandon the use of third-party cookies within their Chrome browser. While this announcement initially came out in 2020, Google states the use of third-party cookies will be completely discontinued by the end of 2023. They are the last major browser to do this, as Apple’s Safari and Mozilla Firefox have already gone cookie-less.
Dwindling support of third-party cookies will give consumers more control over what data is being collected. The use of third-party data is already decreasing and with it, consumer insights, which companies use to make improvements or adjustments to their marketing or business strategy. Examples of these improvements could include being able to predict future purchasing behavior, identify audience trends, or further customize relevant content to consumers.
The loss of cookies, now, creates a gap in Consumer Package Goods (CPG) companies’ ability to gather data effectively. Consumer trust will be one of the ultimate factors in obtaining first-party data, as their contribution to your data will be entirely up to them.
First-Party Data Collection Practices
Companies must shift their data collection and marketing techniques to accommodate the shift away from third-party data, and thus be more intentional with how they are going about collecting data. The surge in first-party data collection will support the use of email marketing and similar techniques, as these will become the primary methodologies used to gather consumer data. Some of the methods for collecting first-party data include surveys, consumer feedback, email marketing, and social media. These practices will remain a staple as they meet the consumers’ expectations for safe data collection in a way that gains their trust.
Email marketing: Email sign-up will be one of the biggest tools used to incentivize consumers to contribute to the collection of first-party data directly. One report indicated that 54% of shoppers would be open to sharing their personal information and shopping preferences in order to receive personalized offers.
Loyalty programs: One prominent method within loyalty programs is the use of profile completion bonuses. Account registration can be incentivized to increase captured data while giving the consumer something small in return for their time. This allows for continuous data collection with consumer consent.
Returns and exchanges: Another creative way to incentivize consumers to contribute to first-party data is through returns and exchanges. By placing a feedback system or survey in order to get to the return/exchange page, companies can gain information about the consumer to give targeted ads for what they want. This can also be translated into a quick survey prior to buying a product as to what attracted the consumer to that specific product.
AI/Technology: Insights can also be uncovered through further investment in technology to improve analytics. CPG companies may need to adopt and utilize AI technology and machine learning to gather analytics, as this does not require cookies, but instead algorithms. An example of this is from the food and beverage industry, where Campbell’s is utilizing an AI engine to generate recipes based on taste and preference – this is allowing them to get higher-demand products to market much more efficiently.
Moving Forward with First-Party Data Collection
First-party data collection is critical for companies moving forward in a cookie-less future and navigating evolving consumer privacy laws. Maintaining consumer trust and prioritizing safe data management will be crucial for companies implementing new marketing strategies to collect first-party data.
These tools and techniques can help your organization effectively collect and analyze first-party data to make a meaningful impact on your business. For help with best practices and more, contact our digital experts today.
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Contributions from Jake Barrett and Sarah Radebaugh