The Cookieless Future of eCommerce

What does a cookieless future hold for eCommerce? What steps should businesses and marketers be taking, given the current state of the data privacy landscape and the latest developments concerning third-party cookies? We’re here to answer these pressing questions about the imminent disappearance of third-party cookies and guide you on what you can do to prepare for the cookieless world.

What are third-party cookies, anyway?

First, cookies are small files that store information about a user’s browsing history. A website saves such small files on the user’s device when they visit as a way to monitor and remember them. For example, websites use cookies to remember your login information and the pages you’ve visited.

Cookies sent and used by the website you’re visiting are called first-party cookies. They are only used to remember your activities while you’re on that website.

Meanwhile, cookies set and used by websites other than the one you are currently visiting are called third-party cookies. These cookies are used to track users across websites. It’s third-party cookies that make it possible for advertisers to show you ads of products you’ve previously viewed on every other website you visit.

So, when we speak of a cookieless future, we are referring to a world without third-party cookies. First-party cookies are essential to how websites and apps operate, so they are not going anywhere.

Current data privacy landscape

Cookies have long been used by businesses, advertisers, and marketers to track user behavior and personalize online experiences. However, with growing privacy concerns and changes in browser policies, the use of cookies is becoming increasingly limited.

Several countries have passed laws and regulations restricting the use of cookies and require businesses to obtain user consent for data collection. For example, the European Union’s General Data Protection Regulation (GDPR) requires companies to obtain explicit consent from users for data collection and processing. The California Consumer Privacy Act (CCPA) in the United States also requires businesses to obtain opt-in consent from users before collecting and selling their data. And violation of these regulations comes with a hefty price for erring parties.

Safari and Mozilla Firefox have long blocked third-party cookies by default. Google, on the other hand, previously announced that it would follow suit and block third-party cookies in Chrome by default in 2022, but has delayed it until the second half of 2024.

The latest developments in the cookieless world

One of the latest developments in the cookieless world is the growing popularity of zero-party data. Unlike third-party data collected through third-party cookies, zero-party data is information that users voluntarily provide to businesses, such as their preferences and interests. This type of data is considered more valuable and trustworthy, as users are more likely to provide accurate information when they choose to do so. A zero-party data strategy can help businesses create personalized customer experiences while respecting privacy.

• Zero-party data – data voluntarily shared by users with a company, e.g., through surveys and quizzes
• First-party data – data collected by companies when users browse their website or app, e.g., shopping cart content
• Second-party data – data shared between partner companies, e.g., a hotel website sharing customer data with an airline company
• Third-party data – data collected and sold by a company not related to the website the user is visiting

While shifting away from third-party cookies will require significant changes in digital advertising practices, new technologies and strategies are emerging to help businesses continue providing personalized experiences while respecting user privacy. One notable development is Google’s Privacy Sandbox.

According to Privacy Sandbox VP Anthony Chavez, the initiative was started to allow them to improve people’s privacy “while giving businesses the tools they need to succeed online.” Google collaborates with the “ecosystem on developing privacy-preserving alternatives to third-party cookies and other forms of cross-site tracking.”

Now that the phasing out of third-party cookies is set for late next year, eCommerce and advertising companies only have roughly a year to transition into an entirely cookieless world.

The impact of a cookieless world on eCommerce

In what ways is eCommerce going to be affected when third-party cookies completely disappear?

1. Limited ability to retarget customers

Retargeting is a key strategy for eCommerce businesses to drive sales and conversions. With third-party cookies going away, retargeting will become more complex. Companies may need to turn to other tactics like email marketing and push notifications to reach their target audience.

2. Increased focus on zero-party and first-party data

With third-party cookies disappearing soon, companies must focus on collecting and leveraging zero-party and first-party data. This can include data from website analytics, customer surveys, and social media. By building up their zero-party and first-party data, eCommerce businesses can continue personalizing the customer experience and driving sales.

3. More emphasis on contextual advertising

With the limitations on tracking and targeting, contextual advertising is expected to become more prevalent in the cookieless world. Contextual advertising involves serving ads based on the context of the content rather than the user’s behavior. This means that eCommerce businesses will need to focus on creating high-quality content and optimizing their website for search engines to reach their target audience.

4. Greater need for transparency and trust

With the growing concerns around data privacy, eCommerce businesses will need to be transparent about their data collection practices and earn the trust of their customers. As customers gain more control over their data, companies must prove themselves trustworthy for users to share their data willingly.

Gearing up for a cookieless world: Strategies for eCommerce

We’ve mentioned the growing popularity of zero-party data and how companies need to leverage first-party data more than ever. Optimizing zero-party and first-party data can help you track and understand users better—know their interests and preferences—with their direct participation.

Here are the strategies you should be focusing on to succeed in the eCommerce business in a cookieless world:

1. Email marketing

Go back to the basics. Invest in email marketing software and strategy to open communications with customers and create personalized emails and newsletters.

2. Rewards

Reward customers for subscribing to newsletters, answering emails, and participating in your events. Offer users incentives and give them equivalent value, making them more inclined to provide data.

3. Loyalty program

A loyalty program is one of the best ways to establish a strong relationship with customers and personalize experiences. According to the 2022 North America Customer Loyalty Report, 71% of consumers who are members of loyalty programs consider membership as a meaningful part of their relationship with brands, and 73% of loyalty program members are more inclined to recommend brands with good loyalty programs.

4. Quizzes & surveys

Shoppers will be more willing to share information about themselves if they know they are getting something in return. Offering a personalized shopping experience in exchange for personal data—product preferences, shopping habits, personal characteristics, and email address—is an effective way to leverage value exchange. You can then use the data you collect to make informed decisions related to advertising and targeted marketing in the future.

5. Customer relationship management (CRM)

Focus on building and growing customer relationships directly. Collect emails and customer preferences, and keep information up-to-date.

Conclusion

The future of a cookieless world is full of uncertainty and change. Companies must adapt and develop new strategies to thrive in this new landscape. By focusing on zero-party and first-party data, exploring alternative monetization strategies, adopting new tracking technologies, and prioritizing privacy and data quality, companies can continue to engage and delight their audiences in a cookieless world.

The data privacy landscape is changing quickly. You can no longer rely on third-party data to power your ads and marketing strategy. Let scandiweb help you gear up for a cookieless future. Hit us up today at [email protected] or through the contact form.

Find out more about our Email Marketing and Marketing Automation services.

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