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No more third party cookies: The future of retail marketing in a cookieless world

By April 11, 2022July 11th, 2022Blog Posts, Thought Leadership
Chocolate chip cookies crumbling atop a white surface.

By Yingdan Chen, Hyper intern.

And that’s the way the cookie crumbles…

Thankfully, we’re talking about computer cookies and not the edible kind (so there’s no need to stockpile Maryland cookies during your next supermarket shop…)

Firefox decided to block cookies by default in 2019. More recently, companies like Apple made moves towards greater user privacy, permanently changing the game.

Google has promised to phase out all third party cookies by the end of 2023, so we’re officially on the countdown to a brave, new, cookieless world.

Though it might sound alarming, we think the change presents retail marketers with a great opportunity – to activate their first party data and innovate with marketing.

“This website uses cookies…”

Let’s go back to basics. Cookies are small pieces of data stored in your web browser.

First party cookies.

Used to improve user experiences, for example by saving login details or abandoned cart contents. They’re collected by the website you’re visiting.

Third party cookies.

Used for cross-site tracking, retargeting and digital advertising. They’re collected by other (third party) domains; not the one you’re visiting directly.

The removal of third party cookies aims to meet consumer demands for greater online privacy.

Living in a world without cookies.

Businesses have long relied on third party cookies for targeted advertising campaigns. For some marketers, the future seems uncertain – Adobe’s 2022 Digital Trends Report revealed 38% are unprepared for a cookie-less future.

But it’s not all doom and gloom. Joint research by LiveRamp and Censuswide found 78% of UK marketers surveyed believe the changes will have a positive impact.

So, what will marketers do without third party cookies? It all boils down to first party data.

The value of first party data for marketing has been long overshadowed by third party cookies. However, when it comes to accuracy, relevance and reliability, first party data ticks every box.

Better still, retailers and brands are already collecting it. For example, customer demographics, website metrics (such as page views, sales conversion rate, average order value, abandoned baskets and contact form submissions), social media metrics, mailing list subscribers and customer service data.

Harnessing first party data for targeted marketing.

Retailers and brands need to think about how they can encourage consumers to share their data (whilst complying with GDPR). It’s all about providing value – and the result should be happier, more loyal customers who spend more money.

Loyalty programmes.

Over 90% of businesses have some form of loyalty scheme. Rewards programmes help retailers build relationships with their customers, boosting retention, brand advocacy and customer lifetime value.

Examples include points-based rewards (like Superdrug’s Health & Beautycard), tiered membership programmes (offering more exclusive rewards for higher tiers, like Uber Rewards), paid loyalty schemes (offering benefits for a fee eg Amazon Prime) and value loyalty (promising to donate a percentage of purchases to charity).

Mailing lists.

Retailers and brands need to come up with innovative ways to encourage customers to subscribe to email marketing – for example, discounted first orders or priority access to sales.

But it doesn’t end there. Once retailers have captured customers’ details, they must keep them engaged by sending the right volume of emails, to the right segments of customers, at the right time. Data science can be applied in the form of uplift modelling to create insights-backed email campaigns.

Apps.

Apps are ideal for building relationships with customers. Data science techniques like affinity analytics can help retailers personalise apps for individual needs, creating value.

The data collected by the app can be used to build accurate customer profiles – from the categories they shop, to frequency and value.

Apps also go hand-in-hand with boosting customer loyalty. Customers can use apps to track rewards or access in-store coupons.

Flatlay photograph featuring brightly coloured lightbulbs in different shapes and sizes.

The power of personalisation.

Without third party cookies, businesses need to find innovative ways of reaching new customers. As well as collecting first party data, retailers and brands should consider reviewing their marketing mix.

Contextual advertising.

Rather than relying on data about users, contextual advertising matches the content of a webpage with an ad. For example, a bakeware retailer advertising cookie cutters on a baking recipe site.

This type of advertising relies on retailers having a detailed understanding of their customers. Decision intelligence helps segment first party data to understand customer needs and behaviour, enabling more targeted contextual advertising.

Personalisation.

Research shows consumers are more likely to shop with brands who provide relevant, personalised experiences.

Customer expectations are increasing, thanks in part to the likes of Amazon. By using data science and AI, retailers can build product recommendation engines to personalise customer experiences.

Retail media networks.

Retailers have a lot of property – from bricks and mortar stores, to websites. Retail media presents an opportunity for retailers to diversify income and strengthen relationships with the brands they stock.

We’ve written a blog all about retail media, but in essence, retailers can create networks to sell advertising space on their website or on digital screens in physical stores. The first party data collected creates value – a better understanding of customer behaviour and insights for supply chain and product development.

In summary then, the removal of third party cookies presents retailers and brands with an opportunity. Those using first party data to market their brand innovatively, improve customer experiences and build loyalty will ultimately succeed.

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