In retail, a momentous shift in policy by the big browser operators such as Google is threatening how companies attract visitors to their websites and personalise the customer experience.
For years, brands have used third-party cookies to understand consumer browsing habits once they have left a website, tracking where a visitor goes and helping supply the data that fuels personalisation.
Now, however, the “cookie apocalypse” or “cookiegeddon” is bringing this to an end as the browser operators effectively ban third-party cookies. Apple and Firefox have already acted (and in different ways), and Google will follow in 2022. With 60% and more of the browser market, Google is the most significant player.
The end of third-party cookies has major consequences across retail
This is one of the most far-reaching changes for years. It has been prompted by privacy concerns in the wake of the EU’s GDPR (General Data Protection Regulation) and the CCPA (California Consumer Privacy Act) in California. The end of third-party cookies will choke off the source of data companies use to optimise interactions with web visitors and to target advertising across the internet. Organisations will still be able to use first-party cookies for their own domains, but the use of third-party cookies to monitor what visitors do on other domains will end.
Once this is in force, there is a danger that consumer behaviour will be lost in a fog of data, taking us back to the pre-cookie era when it was very difficult to know who was on a website, their preferences and what their intentions were. Unless organisations start focusing on how to use the data from their own websites, there will a significant drop in revenues from next year. In retail, all brands must think smartly about new solutions that maximise the value of their website visit data so that rather than languish, they increase revenues after the cookie apocalypse.
Google itself has acknowledged the potential impact of its actions. Analysis by the company of the 500 largest Google Ad Manager publishers globally over three months found that where no cookie was present, revenues plummeted by an average of 52% compared with traffic where there was a cookie. This is one of the reasons behind its Privacy Sandbox initiative – an attempt to create a secure environment for personalisation that also protects user privacy. This has yet to yield meaningful results.
Although we know Google plans to end the use of third-party cookies in 2022, information has only trickled out, which is why some companies may not be taking this question as seriously as they should. Unfortunately, each browser operator has its own interpretation of how to deal with third-party cookies and privacy, which has resulted in a diverse set of approaches.
Most browser companies are restricting storage access where cookies have been identified and classified as compromising user privacy. However, Safari has followed a different tack with its Intelligent Tracking Prevention. This uses multiple methods to restrict storage access for third parties algorithmically classified as having cross-site tracking capabilities.
Whatever the approach, the effect is the same – no more third-party cookies. That means brands will have to battle to get consumers to their sites. Keywords and SEO-optimised content will be the main tactics as web-wide behaviour-tracking becomes much harder.
Once consumers are on a company’s website however it can be a different story, provided organisations adopt a more innovative approach to behaviour analysis, segmentation and personalisation. The insight that companies lack after the end of third-party cookies can be more than made up for.
Retail websites must implement AI-powered personalisation using their own data
AI-driven technologies will, for example, analyse and act on the data generated by consumers as they visit a website. This gives companies a far more sophisticated and profitable way of interacting with consumers once they are on a site. This stores just the unique ID of the user in a first-party cookie so is not affected by privacy restrictions, remembering each visitor and their visit but without using any other information. It is the type of cookie used when logging into Facebook, which is more like a tool of the website.
The data from this cookie enables a company to understand the consumer’s behaviour in minute detail and to interact with them without becoming intrusive. Brands can see when consumers are behaving in a way that indicates they are close to buying or have “exit intent” and are about to leave the website.
Using AI, a real-time interaction such as a discount, offer, promotion or recommendation is delivered at exactly the right moment. This is based on the consumer’s current and previous behaviour and what they may have put in their basket. Many organisations, for example, still struggle to use discounts effectively, and undermine their P&L by excitedly making offers before they understand each customer. A retailer should have a solution that guides a consumer through their journey with shrewd recommendations and knows when it is time to close a sale or trigger a decision with an offer or discount.
This more sophisticated and personalised approach to interaction avoids crude tactics such as annoying pop-ups with offers or recommendations that fail to match individual preferences. If a single platform is adopted, retail brands can use the data and analysis to personalise marketing content in SMS messages and emails sent to consumers (who consent), which deliver far better results through precise targeting.
The advantages of a single platform
The single platform approach also has a distinct advantage in efficiency and ease of implementation over any attempt to bolt together solutions for different parts of the customer journey, such as reduction of basket abandonment or upsell tactics.
In the post-cookie apocalypse world, brands will have to use their own first-party cookie data from consumer website visits far more productively. Retailers have long known just how important it is to know the customer. The end of third-party cookies will make this much harder unless retailers revolutionise how they use the visitor data from their own sites. It is becoming a matter of urgency for all brands to optimise the behaviour of their web visitors, using sophisticated personalisation rooted in real-time understanding of the data.
Andy McNab, VP EMEA, Fanplayr