Consumers are offering brands their zero-party data in exchange for a higher quality of service
Brands want access to consumer data. That much is clear. Being able to track consumers’ online activity allows them to mold their products and services to customer tastes and implement targeted advertising campaigns.
Regulators, however, have been cracking down on how brands are able to acquire that all-important data. Consumer privacy has become a hot button issue and the collection of private data is at the forefront.
One data collection method caught in the crosshairs is third-party cookies, which have long-given brands insight into the habits of potential customers. Its future outlook is now bleak.
With data collection methods starting to get turned on their head, brands have come up with a novel idea to collect users’ private data: by simply asking them.
A Better Way
Zero-party data is the information that a consumer willingly gives out to help the brands they are passionate about better cater to their needs.
First-party data, in comparison, is collected by brands following the activity of a consumer once they go on their website. Paying attention to how a potential customer navigates a website and what they purchase allows brands to adjust their marketing.
With that said, collecting zero-party data is often the most helpful method, since it comes directly from the source and leaves nothing to speculation or chance.
Zero-party data does not need to use prediction methods or make any assumptions, it simply asks consumers for their consent to tell them what they plan to purchase in the future and why.
A 2019 McKinsey study found that, while consumers often do not want to share details of minor transactions, they are more willing to go into detail about ones they consider important.
A Matter of Convenience
Convenience, the study found, often plays a big role in determining whether a consumer wants to share information with the company they are purchasing from. If someone knows they are going to be consistently buying from a specific brand, they will be more likely to want to help those transactions go more smoothly down the line.
Katherine McKeever, a loyalty product manager at Yotpo, told Glossy that brands have been diving into collecting zero-party data from consumers.
“Using zero-party data, brands give customers bespoke experiences most relevant to them, like personalized product recommendations, rewards, perks, or exclusive access,” McKeever said.
Brands, McKeever says, have been collecting zero-party data by offering customer incentives such as loyalty programs to create more personalized and convenient shopping experiences.
Zero-party data has also been boosted by the rise of e-commerce. Consumers are increasingly doing their shopping online these days, and that can cause a headache when it comes to items you would normally want to try before you buy.
By granting brands access to their zero-party data, consumers can make this process more convenient by being able to try items on virtually, for example.
Other brands have begun to implement quizzes into their shopping experiences, asking customers questions about what they intend to buy, what their sizes are, and what their preferences are for a certain product.
“Rather than guess what customers want based on third-party data — social media engagement, device identification, page views — zero-party data allows consumers to tell brands exactly what they want,” McKeever told Glossy. “The data pivots from assumed to proven.”
Zero-party data also helps brands maintain customers for life — or at least for the long term. Once a brand is in with a consumer, they can help nurture the relationship — while continuing to collect zero-party data — by offering them incentives such as reward and loyalty programs.
Having the means to help ensure a customer comes back again and again is a huge benefit for any brand, and zero-party data is helping them achieve this universal goal.
“Any form of outreach becomes hyper-relevant when leveraging zero-party data,” McKeever told Glossy. “SMS marketing, email, customer service solutions — all can be enhanced by the zero-party data you collect through a loyalty program.”
Closer to Luxury
Luxury brands are also getting in on the act when it comes to collecting zero-party data from customers who are willing and eager to share it.
A common issue in the luxury industry is a perceived disconnect between brand and consumer, but by collecting zero-party data, luxury brands should be able to offer a more personalized experience for their customers.
In other words, zero-party data could make big waves by helping consumers feel closer to the luxury brands they purchase from.
“Too often, luxury brands just buy media and achieve low-value customer acquisition through a big advertising campaign,” Ana Andjelic, a brand strategist and author, told Vogue. “They’re not thinking enough about granular consumer segmentation which leads to precision targeting, better retention and higher value customer acquisition.”
Saks Fifth Avenue, a luxury department store with flagship locations in Midtown Manhattan and Washington D.C., has already been taking advantage of zero-party data to grow their customer loyalty.
Consumers who shop at Saks can save their preferences for designers, categories, and sizes, allowing the company to create personalized recommendations that can be used to help necessitate future purchases.
Saks also gives customers who opt in to sharing zero-party data exclusive access to designer events that cater to their specific interests.
“We treat zero-party data as the voice of the customer,” Saks Chief Marketing Officer Emily Essner told Vogue. “(It) is incredibly valuable in accelerating our goal of one-to-one personalization.”
In an age where privacy and consent take precedent, zero-party data is helping bridge the gap between consumers and the brands they love.
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