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We are now a year and a half away from the end of third-party cookies. Since the dawn of e-commerce, those cookies have significantly helped retailers personalise a consumer’s shopping experience, and design marketing activations to target and capture new customers.
Now online retailers are forced to revisit their personalisation strategies without those cookies, and need to be aware of their options to keep engaging consumers in a relevant way. This, while in an online world leaning towards more consumer privacy and in which more and more users are not identified. Indeed, a recent study shows that already 55% of Australian users can no longer be identified across websites with traditional means (Teads Australia, February 2022) .
Retailers who heavily rely on third-party cookies, and think they can wait until next year to revisit their targeting and personalisation strategies may now wish to bring this priority forward, as they may already be missing out on engaging a significant sector of the market.
Only headwinds for data collection and identification
There are a number of reasons so many people can no longer be identified when they visit websites. There are many conversations about Google’s removal of third-party cookies on Chrome, but Apple has equally tightened privacy settings for its users as early as 2020, fully blocking third-party cookies on the Safari browser.
Consumers are also increasingly aware and literate about protecting their identity online, and many are being proactive about it, using tools that prevent them from being tracked or identified online. This awareness is not new, but now accelerating, and Australians are increasingly displeased with the way brands are exploiting their data for commercial gains and purposes. Back in 2020, 94% of respondents to a survey conducted by the Consumer Policy Research Centre said they were uncomfortable with how their personal information is collected and shared online.
Finally, we are moving to a regulatory framework where consumer privacy is paramount. Privacy regulations are tightening globally, but also in Australia, where an updated privacy act could soon include new data privacy rules equally—if not more—stringent than the European’s GDPR.
The result is that we are heading towards a privacy-friendly and cookieless ecosystem, in which consumers will be expecting relevant personalisations and product recommendations from their retail brands, and retail players have to figure out how they solve this equation- and very soon.
Alternatives to cookies call for alternative vision
Opinions and perspectives differ about alternative options to third-party cookies that are more or less privacy-friendly. For most, the common denominator is that they still involve, at different levels, some form of consumer identification.
One of the most lauded ones, surprisingly, is the creation of unique IDs, which are essentially another way of identifying consumers across platforms to continue targeting and tracking them. This alternative does not offer an alternative to the root issue, and lacks a new vision entirely. First-party data can help identify online users and personalise their experience, but presents a couple of issues: the large majority of consumers do not log in, and therefore can’t be identified until the check out process, and given the current trends around privacy, consumers are likely to limit the brands they agree to share their data with.
Finally, contextual analytics is an AI and machine learning-based approach, where the AI personalises the experience of a consumer visiting a website solely based on their real-time behaviour. This approach doesn’t require collecting any data, allows for personalising the experience of anonymous visitors, and has the advantage of adjusting product recommendations based on the consumer’s current intent. For example, if they come to buy running shoes, but their interest suddenly shifts to a yoga mat for their friend, the AI will see this, and change product recommendations immediately.
Whilst contextual analytics present many advantages, it is not a panacea, and for retailers, the way forward may reside in a mix of different approaches, that they will need to refine and calibrate based on their needs. Our belief is that however retailers choose to approach the next era of e-commerce, it is paramount that it is done in a way that respects consumers’ privacy. There are still too many talks encouraging retailers to continue harvesting people’s data in one way or another, and this is an obsession I believe we need to break.
Brett Gronow is founder and executive chairman at Systema AI.
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