Cookies or not, Grow your eCommerce Business with Reflektion
Customer data is the fuel on which online personalization thrives. Countless personalization solutions leverage the use of third party cookies to track a user’s activity across sites and offer this data in various forms such as segments to various buyers of this data such as eCommerce, also known as electronic commerce, digital commerce, or internet commerce, refers to the buying and selling o... More retailers.
Cookies and User Privacy
More formally known as an HTTP cookie or a browser cookie, the “cookie” is essentially a packet of user specific information a computer receives and then sends back without changing or altering it. Since cookies track the site’s shopper’s visit, it allows the data consumer to re-target the user based on the shopper’s activities outside their walls. But the fact is that cookies come in two flavors: third party cookies — that everyone generally refers to — and first-party cookies. Let’s try to understand each cookie type and their usage implications.
Third-party cookies are used to track user behavior across multiple sites, and are therefore generally hosted externally through a third-party gateway (hence the third-party in the name). The information contained in third-party cookies enables several online marketing methods, which is why it is sold to both advertisers and prospects/customers in a number of ways. By allowing the tracking of cookies, shoppers may be retargeted with digital advertisements while browsing other sites — typically delivered via advertising technology (AdTech) solutions such as AdRoll, AdSense, Criteo, or Facebook Ads.
But shoppers don’t want their privacy to be invaded and mis-used for serving the business interests of corporations. This is why Apple created and instituted the Intelligent Tracking Prevention (ITP) approach to block this type of tracking within their Safari browser back in 2017, giving the user the control to turn off this tracking. Another example of ad-blocking is the blocking of images and other third-party scripts in email, since image blocks are also used to track users in lieu of cookies.
Privacy acts such as GDPR for the EU and CCPA for California/United States now require websites to explicitly ask the first time / anonymous visitor to agree to this tracking. Both privacy acts also require users to be informed whether they are being tracked, what specifically is tracked, and how it will be used — whenever they ask for it.
Since Apple’s ITP approach impacts browsers in general, it has pushed all the other major browsers such as Chrome and Internet Explorer to also implement ITP. As a result, all major browsers, and most notably, the highly adopted Google Chrome browser, have announced plans to phase out support for third-party cookies over the next two years. Firefox began blocking third-party cookies in summer of 2019. This shift is part of their strategy to re-architect the standards of the web and make it privacy-preserving by default. Since a number of personalization providers are dependent on third-party tracking, this industry shift impacts personalization solutions — and eCommerce sites using them — in a big way.
On the other hand, a first-party cookie is one that originates and is hosted directly from the site that a person visited. Unlike a third-party cookie, the visitor information contained in the first-party cookie cannot be shared with any other site. First-party cookies improve user experience and are compliant with Apple’s ITP.
Prior to ITP, both first and third-party cookies could live (or not expire) up to 30 days. To improve user privacy even more, Apple has released ITP 2.2, which reduces the lifespan of a first-party cookie from 7 days to 24 hrs.
This raises significant challenges for eCommerce retailers using personalization providers in general, since most of the personalization solutions in the market are dependent on first-party cookies to re-create the shopper’s state or personalization (e.g. what was in their cart, etc.). Notably, a large majority of a retailer’s shoppers do not complete their purchases within the same 24 hour window. Particularly, high priced or complex products such as jewelry are significantly impacted because their average buying time frame spans multiple days.
Industry trends impacting personalization
To make it more interesting, note that mobile eCommerce traffic is rapidly exceeding desktop traffic and most of it occurs through Apple devices, which have ITP enabled by default. Mobile-native apps don’t support third-party cookies, which makes it quite challenging to personalize eCommerce for mobile users.
While private browsing doesn’t protect users from all tracking, there is still an exponential growth of private browsing and proxy based browsing. Consider every consumer coming to an eCommerce site using an incognito window — the customer history, by virtue of being absent, would have no value in predicting purchase intent.
Not surprising, given these challenges many major websites and eCommerce, also known as electronic commerce, digital commerce, or internet commerce, refers to the buying and selling o... More sites are actively considering or committed to abandoning cookies all together.
Bracing for the impact
The privacy climate surrounding cookies impacts eCommerce retailers directly given their growing use of personalization solutions. These online retailers are also prevented from personalizing given their growing mobile traffic, which adversely impacts their revenue. Several retailers have also heavily invested in Customer Data Platforms and ad-targeting platforms, which use third-party cookies for customer segmentation. Needless to say, such eCommerce sites would be challenged to track shoppers across the site and grow their revenues.
Real-time purchase intent, not history, drives revenue
To increase revenue through personalization, retailers need to identify purchase intent in real-time and consider better alternatives than cookies. Relying on historical customer data via third or first-party cookies isn’t very useful for predicting purchase intent of online shoppers in-the-moment. Additionally, customer history is quite irrelevant for predicting purchase intent for proxy or gift shopping that happens around the holidays.
Modern Artificial intelligence (AI) is the simulation of human intelligence processes by machines, typically computer systems. ... More/ML algorithms overcome these limitations by detecting similar or look-alike purchase behavior in the customers by analyzing patterns across millions of in-session data points. Given that a shopper’s purchase intent has nothing to do with who they are and what they did, but everything to do with what they are interested in, its not surprising that the true purchase intent of a shopper can only be identified in the current session. Hence, in-session data is more useful for personalizing online experiences for eCommerce shoppers.
To be better prepared, eCommerce sites need to plan ahead and start evaluating options for personalization solutions that are well equipped for embracing the industry shift in customer privacy. The ideal personalization solution is one that is not dependent on third-party cookies, but instead one that can deliver individualized real-time personalization based on anonymized customer data and AI/ML. The need for anonymized customer data cannot be undermined — especially given the increasing importance of protecting consumer privacy.
Reflektion offers a future-proof personalization solution
Reflektion’s customer engagement platform solves the customer privacy concern in a unique manner, while delivering In the eCommerce context, one-to-one or 1:1 personalization refers to the practice of delivering a unique, hyper-targete... More to eCommerce shoppers in real-time and at scale.
The above mentioned approaches don’t require tracking any specific individual and rather use lookalike shopper behavior analysis by AI/ML across millions of anonymous data points to predict purchase intent in real-time. This gives Reflektion and its retail customers a significant competitive edge compared to other approaches in the market.
As a comparison, legacy personalization providers are dependent on shopper history (clickstream + transactions) and some form of segmentation via third-party cookies or customer login to re-create the customer experience. This is not the case with Reflektion.
Grow eCommerce revenue with Reflektion
In spite of growing privacy concerns and industry regulations, Reflektion provides a unique 1:1 personalization platform to help eCommerce sites increase revenue by responding to shoppers’ purchase intent in real-time — and at scale across channels. While online shopper behaviors change across seasons and geographies, Reflektion’s focus on the in-session purchase intent — rather than historical behavior — drives higher site conversions and revenue. In fact, Reflektion’s personalization platform improves eCommerce site conversion rates by 25%, add-to-cart rates by 150% and revenue by 15%.
Imagine what Reflektion can do for your eCommerce site growth and engagement! To learn more and discover how Reflektion can dramatically improve conversion rates, customer engagement, and eCommerce revenue, please schedule your personalized demo today.