Zero Party Data : Efficient approach in eCommerce businesses

Unlatching Personalized Commerce: Harnessing the Power of Zero-Party Data

24 Aug 2023

Sheen Xavier James

Delivery Manager

In the world of online commerce, there is a dramatic shift happening in the way customer data & preferences are collected, shared and used. Big technology companies have been complying in this journey and have started putting in place their own privacy measures. For example – first, Safari killed the tracking cookie and then, the iOS 14.5 update limited the use of device IDs. Google Chrome will soon be eliminating the 3rd party cookies completely. All of these changes have triggered a fundamental shift in the way the retail and eCommerce industry does marketing.

“Zero-party data” is a term coined by Forrester Research and the definition is “Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize them.” It is explicit data and not something inferred from how a customer behaves on a particular site. The end customer has an expectation of a value exchange in return, primarily in terms of a better shopping experience suiting their individual preferences. In this age of privacy concerns, customers want to be in control of what data is shared to obtain that personalized experience with any company. Major browsers are moving to phase out third-party cookies and allow users to easily opt out of being tracked. This is resulting in marketers placing a higher premium and reliance on data that their audiences knowingly and voluntarily give them.

 Characteristics of ZPD

• Information which customers freely, actively, and intentionally choose to share.
  
  
• Safeguards consumer privacy as it complies with privacy laws and regulations and laws like the General Data Protection Regulation (GDPR) and CCPA, collecting data using a consent-based approach that respects customers and keeps the company protected from legal issues.
  
  
• Accurate. Since it’s provided by the customer, one doesn’t have to question the source.
  
  
• It cannot be shared outside the company without permission.
  

Creative marketers have produced a multitude of innovative ideas to collect this data, all while keeping the process an entertaining experience for customers.
Examples of ZPD collection methods,

• Interactive Quizzes
  
  
• Conversational Pop-Ups
  
  
• Asking customers to rate and review their purchases (email, SMS, chat, phone)
  
  
• Social Media Polls
  
  
• Product Onboarding
  
  
• Contests
  
  
• Prompting customers to complete user profiles – Account Creation
  
  
• Loyalty program enrolment
  

Adopting an efficient ZPD approach results in many advantages for ecommerce businesses 

• Can be applied to personalize content, provide meaningful product recommendations mapped to individuals’ stated preferences.
  
  
• Create buyer profiles sorted by demographic, preference, and buying history. Allows hyper Segmentation – creating as many segments as possible, sometimes only for a moment, even for a single customer, to deliver an extremely personalized digital experience.
  
  
• Enable ecommerce stores to create more accurate customer profiles resulting in improved customer satisfaction and stickiness.
  
  
• Personalise Marketing – You get to dig into each customer’s personal needs and wants. What’s their favourite flavour, what size they wear, what’s their style etc.
  
  
• To create interactive quizzes for specific product recommendations and then request customers to opt into Facebook Messenger or SMS campaigns.
  
  
• Finetune product innovation roadmaps – The soon to be launched products can use information from what customers prefer now to refine them for faster adoption in the market.
  
  
• Optimize websites with hyper-personalization – e.g.:- Tailor-made abandoned cart notifications – A coupon code is automatically prompted with a picture of the product abandoned and a personalized message that includes the shopper’s first name. When a customer hears more than their name – but also sees a product they want and knows you are paying attention – there’s a compounding effect.
  

In Conclusion, zero-party data can help marketers learn more about customers over time and build trust. With zero-party data incorporated into the commerce data stream, online retailers would be well equipped to optimize their e-commerce personalization efforts, connecting customers with the products they desire and helping the retailer increase revenue and facilitate brand loyalty.

In the rapidly evolving world of online commerce, the concept of Zero-Party Data (ZPD) has emerged as a game-changer. As privacy regulations reshape data collection, ZPD represents data intentionally shared by customers for a better shopping experience. This data is accurate, privacy-compliant, and exclusively used by the brand. Innovative methods like quizzes and pop-ups gather ZPD, enabling personalized marketing and refined product innovation. ZPD isn’t just about data; it’s about trust, loyalty, and mutually beneficial exchanges. In this new era, brands can enhance customer experiences, foster loyalty, and navigate privacy challenges effectively.

References

8 Ways to Use Your Zero-Party Data for Ecommerce Personalization

The Importance of Zero-Party Data | Bloomreach