The Importance of First Party Data for eCommerce Companies

The Importance of First Party Data for eCommerce Companies

eCommerce brands are shifting their focus to first party data to overcome the downfall of third-party cookies and the increased regulations around customer privacy. In this blog post, we will discuss how eCommerce companies can leverage this type of data to gain valuable insights and build knowledge of their customers.

What is first party data?

First party data is data you collect from your customers through direct interaction on your owned channels. In essence, getting first party data is a simple direct transaction between your company and customers.

5 benefits of using first party data

1. Increase trust and transparency: Compliance with privacy laws benefits your company and your customers. First party data is information that your users and customers directly share with you. You, therefore, need to be transparent about the purposes for your data collection and always ask for customer approval.

2. More accurate and higher quality data: Direct customer data collection enables you to maintain accurate and current data. Through interactive experiences, you may collect information that will provide you with more precise information about your customers, allowing you to create tailored and personalised experiences.

3. Effective marketing campaigns: The first party data you gather enables you to produce timely and dynamic content and maintain user engagement through specialised experiences. In short, first party data helps customer-centric companies gain a competitive advantage by providing more personalised experiences.

4. Retaining loyal customers: More accurate data enables you to segment your audience better and nurture each group in accordance with the specifics of their customer profile. You may enhance contextual targeting by gathering more first party data and building audiences based on behavioural data.

5. Reduced costs compared to third-party data: It is more profitable to invest in first party data collection, archiving, and processing solutions rather than paying for third-party data, which is less accurate and trustworthy than data you obtain directly from your customers. Additionally, using first party data increases return on investment (ROI) by enabling more individualised experiences that are more likely to result in sales.

Overcoming first party data challenges

1. The need for strategy: It is important to set clear and precise objectives before gathering information. Otherwise, you run the risk of frantically searching for information that you might not even need. Look for areas of understanding where there are gaps and consider the best questions to ask your customers.

2. An identity crisis: Your customers use a variety of different channels to interact with your brand. The more extensive and varied your online presence becomes, the harder it gets to consolidate information into one clear profile. Therefore, identify touchpoints which will help merge activity across platforms. Avoid hassling people with the same questions on different profiles by tailoring questions carefully to the nuances of each space.

3. Cross platform integration: Even with a robust first party data marketing strategy, you’re still likely to rely on information that’s found with third parties. Look carefully at what tools you’re using to pull data together and how much control they give you over details which are yours by right. Don’t be afraid to get rid of a tool if it’s impacting your overall result.

Final thoughts

If used properly, first party data can help eCommerce companies better understand their customers and use that insight to increase sales. If you are interested in how the BDO eCommerce team can help optimise your online offering, click here.