From Collection to Privacy: Insight Into Zero- and First-Party Data Usage

Customer data plays a vital role in the growth of retail brands. Marketers for these companies are very familiar with the need for data collected directly from consumers. With this year’s roll out of Tracking Protection from Google to 1 percent of Chrome users, the clock is ticking down even faster to get zero- and first-party data collection right. The time for marketers to lean in, ask questions, and get strategy in order is now.

Zero- and First-Party Data: Know the Difference

Collecting and using zero- and first-party data is essential, especially as omnichannel formats become increasingly available for retail shopping. The first and most important thing to understand is these types of data are not the same or interchangeable. Each one refers to data coming directly from a consumer, but the type of information and manner of sharing are vastly different.

Zero-party data applies to any information a customer intentionally and voluntarily shares with you. For example, responding to polls and surveys from the brand or sharing something personal like a birthday. The consumer is conscious they're sharing specific data about themselves with a retail brand and consent to do so.

First-party data is information that a brand passively gathers through interactions with customers and their behavior such as purchase history or discounts used. Consent is implied because a consumer is choosing to interact with an app or website, for example, but it isn’t openly stated.

Balance the Scale Between Customer Insight and Consumer Privacy

Consumers are more aware than ever of how important their data is to retailers. Therefore, striking the right balance between collecting that data and keeping it safe is a must. It’s important to remember customer experience and privacy are two halves of one whole.

Take United Airlines as an example. Late last year, the airline noted it might start using its customer data to help companies show targeted ads to passengers in-flight. Something like this could absolutely take the personalization game to the next level, so long as the brand balances data privacy and transparency. Building and maintaining consumer trust is key here.

In the retail industry, digital shelves and in-store displays can be used in a similar way to personalize the experience for shoppers where a large portion of transactions are happening. Retail media networks, traditionally used across digital channels, can be used with in-store tech and digital displays to bring similar experiences and results to in-store shopping.

Collecting zero- and first-party data to inform relevant and timely recommendations for shoppers can be a very powerful tool for retail marketers. But personalization like this can only be effective if privacy and protection of consumer data is kept at the forefront.

Data Strategy Requires More Than Tech Solutions

A good strategy for collecting, using and safeguarding consumer data demands a culture shift. How retail brands handle zero- and first-party customer data is equally critical to success as maintaining the balance between privacy and customer data collection and usage.

Success means getting closer to customers than ever before — understanding not only who they are, but also what motivates them, what they're interested in right now vs. last week, how their interests might change over time, and more. This requires going deeper than transaction history and browsing data. Baking zero- and first-party data into marketing strategies must be table stakes now. This is the way forward for making data-driven decisions to inform future strategies that will meet consumers exactly where they are.

Marc Mathies is the senior vice president of NXTDRIVE at Vericast, a marketing technology partner that connects businesses to the people they want to influence by uniting data for smarter and more useful media activations.