Why First-Party Data Will Save Your Retail Brand
The death of the third-party brings new life to the first-party cookie. Learn what this even means, and why understanding it could make all the difference in your brand's success.
Has the internet felt... quieter to you lately?
It’s not just that people have forever logged off of Twitter (yes, we see you Meta with Threads!). Rather, there seems to be a concerted global effort to increase privacy across the internet. As an analyst at Forrester Research put it: “Our research counts about 100 countries around the world that have some form of data privacy or security rules in place. Arguably, these rules have also become more stringent.” (source)
Years – perhaps decades – of data hacks, leaks, and other issues have prompted governments to further protect the data privacy of everyday people online. And while that is generally good for everyone, it has been an obstacle for online businesses who have relied on readily available customer insights from third-parties to make marketing decisions. So, what's happened?
The death of the third-party cookie
The third-party cookie used to be the data-whisperer for online retailers who wanted to know the digital habits of their customers. From where they gathered online, to what products they browsed across the internet, to demographic information like age, gender, and income. Third-party cookies made it so that brand marketers could accurately target specific audiences through ad platforms such as Meta and Google Ads.
But the “cookiepocalypse” unfurled when both Google and Apple announced they would end the use of third-party cookies by 2022. And while at least Google has slowed their roll on this through 2024, it’s an inevitability that brands have to shift focus to a much tastier cookie.
The first-party cookie, that is.
What is a first-party cookie?
While third-party cookies were generally created by ad companies to follow users around the internet, tracking and data-mining their movements to any domain that had partnered with these advertisers, first-party cookies live on single domains.
Think of them as cookies you baked just for your own customers. Your online shoppers take your fresh, first-party cookie as they come through the virtual doors and keep it with them as they shop and ultimately leave. No other brand has access to these cookies; they are yours and yours alone. So while you know that Emily browsed a few sundresses and wide-brimmed hats across your website, none of your competitors know anything about what Emily’s been up to on your domain.
In essence, first-party cookies are really what cookies were ostensibly invented for: to enhance a customer’s experience with one brand. It’s so they don’t have to re-enter their data each time they visit, and so they can get better service from brands they trust and have a real relationship with.
Third-party cookies were invented to chase customers around the internet and show them the ads of the highest bidder. “We saw you click on Nike shoes, so here are similar Reeboks because Reeboks paid more than Nike in the last two seconds while this ad space loaded. You’re welcome!”
And because third-party cookies have been considered non-essential, the result has been that they are easy to block and delete by both users and web browsers. For example, they are blocked on Safari by default; yes, even Safari on iPhones.
On the other hand, most users and browsers are happy to allow first-party cookies. Since they are domain specific, they only have upside for both parties by making the relationship between customers and brands feel seamless and personal.
Now here's how to take your first-party data to the next level.
As the curtain closes on third-party cookies, first-party data is taking center stage by storm. The necessity for companies to focus on their first-party data strategy is clear: it offers the most reliable, ethical, and sustainable way to understand consumer behavior and preferences in this new privacy-focused digital landscape.
For online retail brands, the benefits of harnessing first-party data extend far beyond compliance with these new privacy regulations. Here's why:
1. Stronger Personalization
First, first-party data enables a higher degree of personalization. As consumers increasingly expect tailored shopping experiences, brands equipped with rich first-party data can deliver more relevant product recommendations, content, and communication. From something as simple as auto-filled forms, to enabling omnichannel marketing strategies, this type of elevated clienteling experience that customers expect is powered by first-party cookies.
2. Laser-focused Customer Segmentation
Second, first-party data supports accurate customer segmentation. Retailers can use this data to categorize their customers into specific groups based on shared characteristics, enabling more targeted and effective marketing campaigns. When brands can no longer rely on Meta or Google to do this sort of segmentation for them, capturing first-party data in your retail CRM is the best way to segment and target not only your core customers, but the casual visitors who just happen across your online store.
3. Increased Customer Loyalty and Retention
Third, first-party data improves customer loyalty and retention. By understanding customers on a deeper level, brands can create bespoke experiences that foster long-term relationships and increase customer lifetime value. And this is a self-feeding loop as well: you need to win your customer’s trust to continue to place your cookies on their browsers, and then these cookies will help you maintain that trust by giving you the customer insights you need to provide the best online experience.
The end of third-party cookies is here, ready or not
Ultimately, every retailer is currently being forced to rely more on first-party data because the other option will be going extinct next year… unless Google drags their feet again. And yes, let’s be honest here: Google’s empire is built on ads. So it will probably have a trick up its sleeve to somehow target people with ads even without third-party cookies. But no retail brand can rely on Google to just “figure it out” for them.
Right now, the use of first-party data aligns with the principles of modern online clienteling, which seeks to replicate the personalized experience of in-store shopping in the digital realm. Retail brands can utilize first-party data to understand each customer's unique journey, personalize interactions, and make each touchpoint feel exclusive. This approach enhances customer satisfaction and loyalty, driving higher conversion rates and boosting overall brand value; and it’s the clearest path to sustainability for your business in the coming years.
There’s a reason why Endear shows an average ROI of 64X the cost of a subscription: our CRM leverages your first-party data to the max in order to turn casual shoppers into brand loyalists.
Get the Guide: How to Leverage First-Party Data in Retail
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Written by
Robert Woo, Writer @ EndearEdited by
Danielle Bissonnette, Content Marketing Manager @ Endear