Cookies have been a key feature in the eCommerce industry as it helps them gather more data about store visitors and provide a customized shopping experience among other things. Think, product recommendations or the retargeting ads you’ve been seeing!
But with the recent changes, it is becoming extremely important for businesses to become less dependent on cookies to run optimally since browsers like Google Chrome, Firefox and Safari are getting rid of them.
It is all the more important for eCommerce store owners to pay heed to these changes since it will affect their cookieless targeting campaigns, conversion rates and even measuring the analytics.
So, whether you are an eCommerce business owner, a marketer trying to figure out how to navigate this change, or a creative director who needs to plan for the future about how you will be able to create personalized user experiences, this post covers everything you need to know about the cookieless future.
What is cookieless eCommerce?
Before getting to cookieless eCommerce, it is important to know what cookies are.
Cookies are small text-based files that are used to track user behavior and preferences. They can either be first-party cookies, third-party cookies or zombie cookies. Marketers and advertisers use them in order to show more relevant ads to their viewers.
- First-Party Cookies: These are created by the site you visit. The website sends these cookies to your browser and stores them on your device.
- Third-Party Cookies: These are created by other sites. For example, if you visit a site with a “Like” button from Facebook, that button will create a third-party cookie.
- Session Cookies: These are only used for the duration of your visit to a site and are then deleted.
While first-party and a chunk of third-party cookies can be safe, zombie cookies can prove to be a security threat as they are permanently stored on your device and hackers can get access to them.
A cookieless eCommerce solution refers to the practice of storing web analytics data on remote servers as opposed to storing them on users’ devices. With this method, marketers can still obtain all the significant analytics data while also maintaining the privacy of their customers.
How will cookieless eCommerce impact businesses?
Now let’s take a look at how cookieless eCommerce will impact online businesses:
Keeping tabs on user activity and engagement is crucial in the world of eCommerce. Cookies help you do just that.
Without cookies assisting in cross-platform identification, these limits will make it challenging to analyze ad impressions, frequency and classify incoming customers as new or returning. This can even result in lost sales because even the most basic metrics can become problematic to measure.
Large tech corporations such as Google have come up with probable solutions. The key among them is Federated Learning of Cohorts (FLoC), which will show ads to people based on browsing cohorts and make identifying them across the web easier by grouping users together based on their shared identifiers.
However, as of early 2021, no single solution had arrived on the scene and none seemed to be gaining any real traction given the complexity of the issue. Now, in January 2022, Google will replace FLoC with Topics API to learn about consumers’ online interests.
When third-party cookies disappear, marketers are going to lose a lot of the data that they currently have access to. This will cause an issue with targeted ads and will make it difficult for eCommerce brands to find out which strategies are effective and which ones aren't. It’s likely that return on ad spend (ROAS) will drop, as well as customer acquisition costs.
That’s okay though, there are a few alternatives out there on the market like deep linking in the case of apps and cookieless targeting - both of which can help you reach potential buyers at different stages in their buyer's journey.
However, it is important to note that consumers will start getting ads that aren’t as personalized due to increased security and privacy control.
Attributing data to establish how effective your campaign and marketing efforts are, is an important part of evaluating the effectiveness of your online content marketing strategies. Multi-touch attribution models help you understand how customers interacted with different channels in their journey before they became a customer.
Third-party cookies are the best way to track customer behavior accurately over time. With them gone, the challenges will increase, especially when contacting customers is so central to improving overall marketing performance.
The solution, in this case, would be to move from an attribution model based on views to one that is based on clicks.
Why do you need to switch to cookieless eCommerce?
For years, there’s been a worry about third-party cookies being used by businesses in online marketing and how they can potentially violate a user’s privacy. This has spurred search engines like Google and tech giants like Apple to block the use of third-party cookies on their websites and offer an improved browsing experience that better protects user privacy.
In fact, Google has announced that Chrome will stop supporting third-party cookies by the latter half of 2023.
Now ecommerce businesses have been relying on cookies that collect data to personalize shopping experiences on their websites, and run marketing and advertising campaigns. From displaying product recommendations to running retargeting campaigns to promote interest-oriented products, cookies have been put to extensive use so far!
But now with cookies phasing out, you will need to look into more consumer-centric, authentic ways to collect data to fuel the same objectives.
How can you prepare for cookieless eCommerce?
The ban on third-party cookies is a chance for you to strengthen the data you have on consumers. Instead of relying on traditional data tracking methods that many consumers would consider an invasion of privacy (think about the number of times your friends talk about brands stalking them on social media), you will not need to opt for more ethical means of gaining information.
Simply put, you will need to ask for the information you seek - directly from the consumers.
Not only will this earn consumers' trust, but allow you to learn more about your consumer interests, preferences, purchase behavior and more in a methodical way that can be put to use strategically across all functions to grow your business.
Let’s look at some ways in which you can prepare for cookieless eCommerce:
Improve your first-party data collection
In this case, you collect first-party data through interactions with customers and prospects. As a result, this data is more reliable than third-party data collected by outside sources as it is more specific to what you’re looking for.
First-party data can be collected in several ways, including surveys, customer loyalty programs, customer service interactions, and website data.
This data can be used to create detailed customer profiles that can be used to segment and target marketing messages. It can also track customer behavior over time and identify trends that help you plan product launches and business expansion better.
Explore second-party data options
If you are not able to collect first-hand data owing to the industry you are in or the type of products you sell, you can explore second-party data providers. Second-party data is data collected by one company and then shared with another company.
So, for example, a website that uses first-party cookies to track user behavior could then share that information with your business.
This type of data sharing is generally considered more ethical than third-party data collection because the users have already permitted their data to be collected and shared.
Second-party data providers are usually companies that users already have a relationship with, there’s a higher chance that the users will trust them with their data.
These providers typically include survey platforms, market researchers and similar sites that consumers actively participate in.
Leverage heat maps to understand consumer behavior
Apart from first party and second party data collection methods, there’s another way to understand what your consumers like, have an interest in or are more likely to purchase - your own website.
With the help of smart tools like heat maps on your website, you can understand how consumers interact with different pages on your store, the information they are looking for, what makes them add products to cart and how you can get them to engage with your brand more proactively.
Heatmaps are also a great way to identify where consumers tend to lose interest and drop off from your website.
Invest in a customer data platform
A customer data platform, also known as a CRM will help unify the first-party data, which resides in various marketing tools and platforms, into a single source of truth. This will give you a complete view of your customers, allowing you to create more relevant and personalized experiences for them across all channels.
Data in silos is often hard to read and derive actionables from.
Set up and use server-side tracking
Server-side tracking is a method of tracking user behavior that does not rely on cookies. Instead, it uses the user’s IP address information to track their activity.
Server-side tracking has several advantages over traditional cookie-based tracking:
- It is more accurate: Cookies can be disabled or cleared by users, making it difficult to track their behavior. On the other hand, IP addresses are much harder to change or spoof.
- It is more private: Cookie-based tracking requires storing information about the user on their device. With server-side tracking, that information is stored on the server instead.
- It is more scalable: Cookies are limited in the amount of data they can store, making it difficult to track large numbers of users. Server-side tracking does not have this limitation.
Despite these advantages, server-side tracking is not without its challenges. One of the biggest is that it requires a more complex infrastructure than cookie-based tracking, which can be costly to set up and maintain.
Make use of alternative tracking methods
There are also other alternative tracking methods that your business can leverage to replace cookies. This includes technologies such as fingerprinting and device ID tracking, which may require you to seek help from web developers and data analysts as a one-time infrastructure set up.
Leverage marketing automation at scale
Marketing automation software not just helps automate your email, SMS and other campaigns, but also collect customer data and capture details of their preferences or purchase behavior after every interaction.
Ideally, marketing automation should be set up across all the stages of a customer’s life cycle with your brand. From brand awareness to their first interaction, purchase, reorder and so on, this helps you track and segment customers based on their behavior.
Use data-driven attribution
Data-driven attribution attributes conversions to the specific marketing touchpoints that led to them. Simply put, as a business that is running promotions on different social media platforms, it lets you identify which one is responsible for driving traffic to your store, and which one is leading to an actual sale for your business.
At this point, you should also consider implementing multi-touch attribution. This is important because sometimes it takes more than one campaign to get a consumer to your website or make a purchase.
- Learn more about data-driven attribution
- A beginner’s guide to data-driven attribution
- What is multi-touch attribution and how it impacts marketing
There's no doubt that the future of eCommerce looks very different from the present.
Cookieless eCommerce and data-driven marketing are concepts that will likely change the way businesses operate over the next few years. To put it plainly, the future of digital marketing and social media marketing is cookieless advertising.
We believe that cookieless commerce is actually an opportunity for businesses to get up, close and personal with their consumers and truly understand what they’re looking for.
From a one-sided promotional approach, we are all soon going to move towards two-way communication that helps learn from each other through conversations and upfront data collection.
While technology and trends are dynamic, you can ensure that your online store is equipped to adapt to these change by building on a platform like Shopify. With Shopify, you get access to solutions from experts from various fields all across the world, working on the most complex ecommerce problems. Get started with a free trial today, to know what we mean.