Retailers’ Secret Weapon for Holiday Success: Server-Side Tagging

E-commerce holiday spending reached an impressive peak of $1.17 trillion in 2023, up 3 percent from 2022. If this trend continues — as many analysts expect — then retailers are in for a challenging but lucrative 2024 season.

Retailers’ obstacle (or their opportunity) will be to capitalize on increased consumer spending while heeding shifting consumer expectations. For example, about seven in 10 consumers expect personalized interactions when dealing with a brand online. In fact, 76 percent of consumers are frustrated by nonpersonal brand experiences, which means accurate retargeting is increasingly pivotal to making sales, especially during high-traffic times like the holidays.

Yet retailers must also walk a tricky tightrope as they seek to capitalize on first-party data compliantly and securely.

Our Changing Privacy Landscape

Established privacy regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) — as well as emerging regulations like the proposed American Data Privacy Rights Act (ADPRA) — have ushered in a new era in data collection, one that rightfully prioritizes consumer consent. As a result, retailers must collect data carefully, ensuring that consumer consent is collected proactively and always bound to downstream, third-party vendors.

There are two distinct and equally important considerations to unpack here. First, retailers must ensure transparency about how and when they collect and use consumer data. For instance, cookie capture must always be accompanied by opt-out disclaimers, with comprehensive information about which cookies are optional — due diligence and upfront communication help to ensure that first-party data is ethically and compliantly sourced.

Secondly, retailers must ensure that any data they share with third parties is respected in observance of a consumer’s original consent preferences. Otherwise, shared data may reveal too much information about a consumer. For example, if a consumer opts out of optional cookies on one website, that preference must be reflected when data is shared from Company A to Company B. In other words, the consumer’s optional traffic shouldn’t be recorded in the records of Company A or B. Consent enforcement is key, difficult, and often overlooked.

Noncompliance results in billions of fines annually. And maintaining compliance is even more challenging during the holidays when consumer traffic increases drastically.

The Server-Side Solution

Server-side data collection presents a solution to the challenge of compliant data collection during peak seasons. Unlike traditional client-side methods, which execute on a client’s browser, server-side tags are processed on the retailers' servers. This approach offers multiple advantages:

• More effective holiday campaigns and ads: Consumers crave personalization, and the holiday season is no exception. In fact, microtargeting strategies are becoming more vital as consumers seek competitive differentiators in a saturated retail environment. By prioritizing server-side tags and first-party data, retailers improve their ability to understand their customers across different shopping experiences, enabling them to create hyperpersonalized ads.

• Competitive advantages: Server-side tagging makes it easier for retailers to understand consumer behavior across multiple touchpoints. For example, imagine that a customer makes an online purchase at Marc Jacobs and its sister brand, Sephora, within a five-month period. Tracking and understanding that information can provide critical insights into a consumer’s preferences about marketing and ads. What products might they be interested in next? What kind of outreach do they prefer?

Securely and compliantly tracking consumers across different online experiences creates valuable opportunities to improve the customer experience (CX), especially during high-traffic times. Leading server-side tagging platforms even enable identity hashing that obscures sensitive information-sharing so third parties can receive conversion data without access to a customer’s identifying data like product history.

Preparing for the 2024 Holiday Season

We’re fast approaching Black Friday, Cyber Monday and the onslaught of digital traffic accompanying holiday shopping. Now is the perfect time for retailers to assess their tracking and tagging strategies to ensure they can keep pace with their customers’ evolving expectations about personalization and privacy.

As MetaRouter’s head of product, Greg Brunk leads our team in setting the strategy and building out our Customer Data Infrastructure platform.