For years, brands have relied on cookies to track website visitors, improve the online experience for users, and collect data that aids ad targeting. Cookies also enabled businesses to learn what customers were up to online when not on their website. This practice chugged along until Google announced its plan to phase out third-party cookies on Chrome browsers by 2022. Now in 2024, nearly all web browsers, Google included, have stopped using third-party cookies for retargeting.

Privacy has long been a hot topic globally as new regulations and laws crop up limiting the use of third-party data and the sharing of consumer information. Although many marketers initially balked at this loss, the reality is that zero-, first-party customer data, and second-party data reveal more valuable insights than third-party ever could. The former two are also known as customer-first data, as they’re information a consumer has shared directly with your business either outright or through the way they interact with your brand. Second-party data, meanwhile, is one step removed from customer-first data but is still an important avenue to know about.

Read on to learn more about the different types of data about how you can collect more valuable information from your consumers while respecting their privacy.

What is third-party data?

Third-party data is information companies collect without having a direct relationship with a consumer. It’s always readily available, and its breadth and scope are typically greater than what you can collect in-house or directly from the customer. Third-party data is often purchased or obtained from external sources or websites and can include demographic information, buying signals, and more.

Although it’s becoming harder and harder to access, the good news is third-party data isn’t the totality of consumer information. You can instead acquire and use zero-, first-party customer data-, and second-party data to supercharge your advertising.

Zero-party customer data

Zero-party data is an incredibly powerful tool for brands to leverage. As previously mentioned, it’s information a customer has knowingly shared with you, like purchase intentions, personal context, and how they want the brand to recognize them.

Fatemeh Khatibloo, a former VP principal analyst at Forrester, notes zero-party “is gold” and that, “When a customer trusts a brand enough to provide this really meaningful data, it means that the brand doesn’t have to go off and infer what the customer wants or what their intentions are.”

Many companies rely on surveys and questionnaires to capture information directly from buyers. If you don’t want to burden a customer new to your page though, simply ask what brought them to your website. Are they looking for a gift? Shopping for themselves? Whatever you ask, keep it short and sweet.

First-party customer data

First-party customer data refers to information collected directly from a business’s customers or website visitors. It’s obtained through various channels, such as website analytics, consumer surveys, purchase history, and social media engagement. Unlike second- and third-party data, which are collected from external sources, first-party customer data is unique to a business and provides a deeper understanding of customer behaviors and preferences.

Examples include analytics like pageviews, bounce rate, and conversion rate; demographic information, purchase history, product preferences, and other customer data; and social media engagement metrics, such as likes, shares, and comments.

First-party customer data is the most valuable kind for personalization because it’s taken from a consumer’s site-wide, in-app, and on-page behavior. However, it’s not always readily available. Collecting and analyzing this information requires a strategy and tools to ensure it’s accurate, relevant, and actionable.

Second-party customer data

For the sake of providing all relevant information, let’s go over second-party data (not considered customer-first data). Essentially, it’s someone else’s first-party customer data that you’ve purchased or otherwise obtained. The other organization or brand gathers it firsthand from their audience, which can include activity on websites, apps, social media, in-store purchase history, survey responses, etc.

To access second-party data, you must have direct interaction with the organization that initially collected it. For example, if you’re an independent merchant who makes your own products and hosts them on another eCommerce platform (e.g., selling through another merchant’s store), you could purchase customer data from your selling partners, and vice versa.

A second-party data arrangement gives you more flexibility in the transaction and ensures you receive high-quality information that allows you to build business relationships while simultaneously expanding your audience. You may also be able to negotiate to have your partner gather additional zero- and first-party customer data, which can drive your marketing efforts and be exchanged within HIPAA, FCRA, FERPA, GLBA, ECPA, COPPA, VPPA, GDPR, PIPEDA, and other privacy guidelines.

First-party customer data vs. second- and third-party data

The key difference between the three types of data is that first-party customer data is collected directly from a business’s customers or website visitors, while second- and third-party are obtained from external sources. The former type is richer and provides a deeper understanding of one’s customers. The latter two, on the other hand, are more generalized and may not offer the same level of insight into consumer behaviors.

While second- and third-party data can be valuable in certain situations, businesses that rely solely on them risk missing critical information about their customer base. First party customer data is a must to gather the data necessary to appeal to and convert your target audience.

The importance of first-party customer data in eCommerce

First-party customer data is becoming increasingly important for eCommerce businesses because it provides a wealth of valuable information on consumers. Here are some ways to leverage that data to boost your eCommerce business:

• Personalize the customer experience: First-party data uncovers the details of your buyers’ preferences, purchase history, and behavior on their website. With that information, you can craft personalized experiences for customers, such as recommending products based on their past buys or showing them targeted advertisements.
• Develop effective marketing strategies: By analyzing consumer behavior and preferences, you can identify the most effective channels and messages to reach your target audience.
• Increase customer loyalty and retention: With first-party data, you can engage more with shoppers and provide relevant content, which contributes to increased loyalty and retention.

9 Ways to gather first-party customer data

Now, you need to decide how to begin gathering information for your business. To collect first-party customer data, use cookies and tracking pixels and leverage appropriate tools. Then, review customer behaviors to help you analyze the accumulated information.

Throughout this process, you must also abide by data privacy laws and maintain top-notch security to prevent breaches; your consumers should feel confident you’ll protect their information. Luckily, there are many solutions and strategies available to collect and synthesize first-party data effectively and securely.

1) Ask for feedback

The easiest way to acquire information is simply to ask for it. You can request feedback directly from your customers to learn what they’re interested in, what they like and dislike, and how they use your products. This straightforward capture method can reap actionable insights for your business.

We suggest framing your ask to showcase how providing feedback will benefit your buyers. For example, you might send a survey that says, “Your answers will help us prioritize releasing new products that you’ll love.” Or, you could write in an email, “We read every response to fine-tune the deals and discounts we send you.”

2) Use session monitoring tools

A large part of first-party customer data is understanding customer behavior on your owned channels. To capture this information, session monitoring tools are key. Session monitoring shows you how your customers interact with your channels from their perspective so you understand how each channel performs.

These tools can reveal important information about a user’s scrolling, clicks, and time spent on page, giving you insights into their buyer journey. You can use that information to retarget those customers later (for example, if they spent time on a particular product page scrolling and clicking on content, but didn’t buy). They also help you understand where and why customers drop off their journey. This enables you to optimize your pages and improve the flow of your customer journey.

3) Leverage content marketing and newsletters

Content marketing strategies are a win-win for eCommerce brands. A great way to learn what kind of content to serve your customers is to ask for their newsletter preferences. When users opt into your newsletter or other marketing activities, you instantly gain access to important information about them. For instance, you could ask for a checklist of what content they most want to receive before signing up, or you might list the different newsletters you offer and let them choose which list they should join.

In addition to delivering more personalized content, you’ll understand whether a shopper is interested in children’s clothing, men’s or women’s outfits, outdoor gear, etc., to further tailor your communications. Similarly, you can glean insights from your newsletter open-rates and click-through rates (CTR) to discover their interests and hobbies.

4) Incorporate pop-ups, surveys, and quizzes

Surveys and quizzes are fantastic methods of capturing zero-party data. For instance, a pop-up on your home page could ask what kind of products your customer is looking for. Based on their response, you can then recommend product pages instantly to deliver a personalized and optimized shopping experience.

Or, dropping a fun quiz as shoppers browse can help them discover the right products for their preferences. For example, the makeup brand Il Makiage offers customers a quiz to find their “perfect match” for makeup. Once they learn their right shade, the brand recommends other products that complement both the shade and the product type as part of an upsell/cross-sell strategy.

Using pop-ups or quizzes early in the customer journey offers you a two-fold benefit: First, it can boost engagement and conversion rates, which drive up your revenue. Second, it delivers valuable data to further optimize your website, improve the customer experience, and target your customers more effectively.

You can also capitalize on your order confirmation page to invite buyers to participate in a survey and share their preferences and feedback. An incentive to fill this out could be a 10% discount off their next purchase, or instant access to a new release. Seeking feedback at the end of a customer’s journey, whether at the checkout confirmation stage or via email after the purchase is complete, helps your brand as well: Beyond collecting more data about your customer, it demonstrates to them that you care about their feedback and thus breeds customer loyalty.

5) Loyalty or rewards programs in new customer onboarding

When a new customer onboards, inviting them to your rewards and/or loyalty program is a ripe opportunity to collect valuable data about them, such as their shopping habits, preferences, and interests. These programs can run the gamut from points per dollar spent to insider information and early access to new products.

Whatever you choose, the information your customers share during the onboarding process helps you target them with content they’ll find relevant and exciting.

6) Watch for cart abandonment trends

Your cart abandonment trends deliver important information about your customers and buying experience. They reveal thresholds concerning shopper tolerance for fees and help you uncover their behaviors.

For example, some consumers add items to their carts and then abandon them because online shopping is a habit or way to kill time — they have no intention of checking out and completing a purchase.

With this data, you can hone in on who your audience is, what they’re interested in, and thus reduce your cart abandonment rates.

7) Utilize NPS

Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement derived from asking buyers how likely they are to recommend a product or service to others. It operates on a scale of 0-10. From this score, you can determine which people are detractors, passives, and promoters, essentially showing you who your biggest fans are and who you need to work on:

• Detractors: Customers who rate your product or brand from 0-6. This means they’re unlikely to recommend your brand or product to others and probably won’t stick around for a repeat purchase. Worse, they may even discourage potential buyers.
• Passives: Customers who rate your product or brand a 7 or 8. These individuals don’t actively recommend your brand but are also unlikely to damage it. Passives are very close to becoming promoters and can be won over, so this is a space you should investigate and see what it takes to convince them.
• Promoters: Customers who rate your brand and products a 9 or 10. These enthusiastic and loyal followers act as brand ambassadors to enhance your brand’s traction, increase referrals, and make repeat purchases.

Capture NPS via website surveys, in-app questionnaires, or email newsletters and use those scores to target and retarget customers. For example, if you have happy buyers, you might want to invite them to leave a review or join your referral program.

8) Leverage customer service integrations

Customer support is one of the few places where buyers voluntarily supply information to your company. You can analyze the wording in the tickets you receive to watch for trends, then segment your customers based on the type of tickets they submit. For example, if someone sends in a question about auto-replenishment and they aren’t a customer yet, you can mark them as interested in the program and potentially open to more information about it.

Further, many shoppers value additional support during their online experience. Making customer service easily accessible can help you identify needs more quickly so you can take action and customize the shopping experience for people in real-time (or close to it). Customer service integrations like live chat capture real-time information about a consumer’s experience and journey for your records.

9) Analyze your CRM for insights

Your CRM is full of actionable insights to improve your customer outreach and marketing efforts. For instance, depending on the type of information you capture and store, it can segment your buyers by characteristics like profession, title, family data, the number of times they’ve visited your site, newsletter preferences, and more.

That data can then inform your future ad campaigns and marketing efforts. For example, you could display infant products to customers who’ve browsed items for newborns and include baby content in their newsletters, or give incentives to shoppers who visit often and fill carts but don’t purchase so they’ll head to checkout.

Tools for collecting and analyzing first-party customer data

Cookies and tracking pixels act as the backbone of first-party customer data collection. Cookies are small files stored on a user’s device that allow websites to remember user preferences and behavior. Tracking pixels, meanwhile, are small images that enable businesses to monitor user behavior on their website. By combining cookies and tracking pixels, businesses can accumulate useful information on user behavior, including pageviews, time spent on the website, and products viewed.

That means you’ll have to set up technology on your website. However, you’ll want to use direct tools as well like:

• Website analytics tools, such as Google Analytics, which provide insights into user behavior on the website.
• CRM tools like Salesforce, which allow businesses to manage customer information, including demographics, purchase history, and website behavior.
• Marketing automation tools, such as HubSpot, to create targeted marketing campaigns based on consumer behavior and preferences.

Tip: Gather customer feedback regularly to gauge how your brand is doing in the eyes of consumers.

Best practices for first-party customer data gathering

When collecting customer-first data, it’s important to have a strategy in place and ensure your data storage and governance are on point to prevent issues with regulatory compliance and privacy. Along with those two pillars, we’ve listed some of key practices to follow to best leverage that information without running into legal trouble.

Combine customer behavior

Customer behavior encompasses your consumers’ demographics, preferences, and actions on your website. That information provides context for your analysis and supports your findings. You can learn about buyer behaviors through various channels, including website analytics, customer surveys, and purchase history. You’ll have a great deal of input to work with, so make sure you use tools to combine data to help you make the most of it.

Ensure data privacy and security

Collecting and analyzing first-party data comes with the responsibility of ensuring privacy and security. Companies must be transparent about the information they collect and how they use it, as well as store it securely and protect it from unauthorized access. In that regard, businesses need to comply with data protection regulations like GDPR and CCPA.

Often, if you use a cloud stack such as Azure, your technology will come with the appropriate security requirements. However, you’ll want to verify storage, security settings, and compliance with privacy regulation (e.g., separation of data, cleaning information so it can’t be tied back to a specific person).

Many regions also require you to disclose what information you hold on a customer when they ask, and you may also have to destroy it at a moment’s notice if they or an authoritative body demands it. This means you’ll want to clean most data of identifying details.

Use analytics and data management

Too much data can be as bad as a lack of it. Without tools and guidance in place to manage that information, it can quickly become overwhelming and useless. Make sure you develop a strategy to help you make use of any data you collect. That also means establishing policies to:

• Outline which data you collect and why
• Identify which tools you use to process data
• Highlight the goals of first-party data collection
• Introduce AI or analytics to gain insights from data

Once you’ve crafted a first-party data strategy, you then have to make sure it continues to meet both your needs and technology. Set a schedule to update your policy as your business, technology, and goals change.

Wrapping up — Leverage first-party customer data to remove reliance on third-party data

Customer insights are critical for any business to retain their consumer base and make smarter decisions. As third-party data becomes more difficult to gather and shoppers demand more in the way of both privacy and personalization, eCommerce professionals need to be strategic about sourcing the right audience information.

At first glance, it may seem like the loss of third-party data is a major blow to your business. In reality, though, it’s opened the opportunity for you to lean into zero-, first-party customer data, and even second-party data sources to uncover actionable insights that deliver more value and drive your business forward faster. The more direct information you receive, the more relevant and valuable the data is to your business.

Published: Mar 29, 2022
Updated: July 16, 2024