Why Retailers Should Reassess Their Data Tracking Strategies Ahead of the Holidays

With online shopping maintaining its edge over the in-store experience post-pandemic, brands are already focusing on their e-commerce advertising strategies ahead of the holidays — from social media integration to maximizing their use of consumer data.

According to a recent survey, a staggering 66 percent of e-commerce decision makers said they were prioritizing collecting first-party customer data in preparation for pre-holiday marketing efforts. However, as consumers grow more data-conscious and privacy-minded in the age of artificial intelligence, retailers risk losing business if they continue to rely on extensive user tracking for customer recruitment, retention and holiday sales strategies.

Given this shift in consumer values, as well as increased regulatory scrutiny around targeted advertising and trackers’ impact on page performance, it’s crucial that retailers reevaluate their data collection practices to instill consumer confidence and encourage brand loyalty before the height of the holiday shopping season.

Bad Privacy is Bad for Business

To understand the impact that pervasive user tracking can have on brand reputation, retailers can look no further than Zoom’s latest data controversy. After the company was called out for collecting customer data and using it to train its AI models, outrage erupted on social media. Individuals were frustrated because Zoom not only failed to properly inform them of this business practice, but it also neglected to provide users a clear option to deny or withdraw their consent to this data collection.

This situation highlights how miscommunication around data practices can impact consumer confidence. More importantly, it shows how difficult brands make it for users to provide informed consent to data collection. Burying an opt-out option in a dense privacy policy isn’t going to cut it for today’s consumers, who want more control of their personal information as its potential to be leveraged for other uses expands.

Protecting Your Customers From Third-Party Tracking

Retailers can easily reassess and adjust their own first-party data practices to put consumers at ease, but there’s a whole world of invisible and unregulated third-party data trackers living on their website, collecting information about their customers and cluttering their e-commerce experiences.

These tracking pixels come from a host of other companies, with the most common offenders being Google, Meta, and Amazon.com. For example, Target's homepage features 13 advertising trackers from Google, DoubleClick, Adobe and more. Beyond slowing down page load speeds for visitors, retailers never even see or benefit from the insights gathered by these third parties.

Leaving this kind of tracking unchecked will only lead to a clunky shopping experience that frustrates consumers and collects their data without expressed consent. It’s imperative that e-commerce providers investigate what other advertisers and companies may have creeped onto their platform and remove these permissions to protect customers, improve site performance, and ensure they’re not inadvertently violating any existing state or federal privacy regulations.

Tailoring Your Strategy to Today’s Buyer

The tide is turning on expectations regarding customer data. Enabling informed consent to first-party data collection is paramount for building customer trust today. But beyond boosting brand confidence, adopting an opt-in policy for targeting strategies and involving consumers in this process will lead to greater returns and efficiency than an opt-out framework. Loyal customers will consent to receive relevant information and advertising from the brands they trust, and brands can avoid wasting targeting resources on unlikely purchasers.

As widespread, unregulated data collection continues to become more and more frowned upon, retailers that take a thoughtful, privacy-first approach to their advertising strategy will ultimately create loyal customers, distinguish themselves from competitors, and increase returns this holiday season.

Jean-Paul Schmetz is the CEO of Ghostery, a digital privacy company giving users back control over their online experience.