The eCommerce sector is currently experiencing a significant shift as it adapts to the new regulations, including GDPR (EU) and CCPA (California), along with evolving customer demands. With Google’s announcement that it will disable the use of third-party cookies for tracking user activity starting in 2024, the landscape of online retail is set to go through a significant shift.
Meanwhile, personalized shopping experiences and omnichannel communication are becoming more popular in the industry. These advancements, powered by artificial intelligence, are helping businesses increase conversion rates, average order values, and customer loyalty. In this article, we will explore how Google’s decision has affected the eCommerce shops and how personalization and omnichannel strategies will influence the industry in the future.
Third-party cookies era
The third-party cookie is a tracking code that marketers have used for years to optimize their campaigns and overall marketing efforts. When users visit certain websites, these cookies are placed in their web browsers. While first-party cookies are generated and tracked by the websites themselves, third-party cookies are produced by other domains.
As a result, third-party cookies gather data from multiple websites and collect various types of information, including personal data like age, gender, location, browser, and device, as well as behavioral data such as visited webpages and usage patterns.
Over the years, marketers have benefited greatly from this method.They have gained valuable insights about target audiences by tracking users across the internet and have been able to attribute user activities to specific touchpoints in the customer journey, determining which channels drive conversions.
The gathered data was used to create targeted advertising campaigns focusing on audiences with specific characteristics. Marketing specialists enhanced their efforts by automating target audience selection and re-engagement through the utilization of tools such as marketing automation software. By using this approach, all marketing activities were both time-saving as well as cost-effective.
Surviving the Death of Third-Party Cookies
The age of third-party cookies is coming to an end as data privacy becomes more and more important each day. In recent years, users have become more aware of the “massive amounts of personal data” that companies collect, and many demand stronger regulations to protect their personal information. As a result of the EU’s General Data Protection Regulation (GDPR) as well as California’s California Consumer Privacy Act (CCPA), the transformation of our data privacy landscape has been accelerated. In alignment with consumers’ expectations, major industry players such as Apple and Google are taking measures to remove the use of third-party cookies.
Traditionally, third-party cookies have focused on quantity rather than quality, allowing websites to track visitors. Eliminating this approach presents an opportunity for companies to create a more genuine omnichannel experience. If users see a significant improvement in the services, they would be more likely to subscribe and grant permission to companies to use their data.
However, aside from privacy being one of the main causes of Adblock usage, a bad user experience also tops the list. The one thing people value almost as much as their privacy is not being spammed with irrelevant advertisements. In fact, recent research shows that, among the US respondents to Blockthrough’s Adblock report, 81% use ad blockers to avoid interruptive/annoying ad experiences. This is compared to 58% who use them to protect their privacy. So when asked whether users would be open to light and non-intrusive ads to support web publishers, 63% responded yes.
User experience, without a doubt, is a determining factor when it comes to the success of your digital marketing campaigns.
According to Coveo, Segment, and McKinsey, consumers are willing to spend over 30% more on products that satisfy their needs.
The Future of Online Advertising: Empowering Personalization & Omnichannel Communication
Most people unfamiliar with marketing define brand communications as spam. The reason is that customers are frequently bombarded with advertising messages, offers, and promotions when they show an interest, for example, in a specific merchant’s website. To avoid being considered spam, communication must be timely, accurate, and relevant to what the specific user would want and seek from the particular brand.
As a general rule, the objective is to accurately anticipate which products each individual wants to purchase, at the right time, while also taking into account the price they are willing to pay, their motivations for purchase, and their preferred communication platform.
Armed with this knowledge, online stores can effectively cultivate enduring relationships with customers, enhance website engagement, and drive sales growth without overwhelming them with repetitive offers.
Customers nowadays expect and prefer a seamless experience when switching between physical stores and online platforms. Retailers need to integrate these channels effectively, making it easy for customers to navigate between different devices and platforms.
To address internet cookies challenges, Google has come up with an innovative solution called the Topics API. This interface aims to target customers based on their interests while prioritizing privacy. Rather than relying on invasive tracking methods, user interests will be determined by analyzing their browsing history over the last three weeks. In addition, artificial intelligence will categorize each webpage based on its content.
All this data will be stored locally on the user’s device and won’t be transmitted to remote servers. Compared to traditional third-party cookies, Google believes that this approach provides a more secure way to collect user activity data.
Overall, Google’s Topics API offers a more user-friendly and privacy-conscious solution, ensuring a smoother experience for customers while respecting their privacy.
In the past, cookies have been a useful tool for tracking website visitors based on size rather than quality. By eliminating this approach, many companies will have to rebuild their marketing strategies from scratch in order to survive on the market. To provide a better service to their customers, they need to collect data about their online behavior, analyze their needs, desires, and preferences. Knowing this information, retailers can actively engage their customers by providing offers, product recommendations, and discounts that accurately match those needs.
Adapting to the new reality would be much easier and successful for online stores by using AI-based platforms that provide such comprehensive processes for growth and customer communication because that is the only way forward for the eCommerce industry in the emerging cookie-less world.
With Google’s decision to eliminate third-party cookies, companies can now provide their customers with an omnichannel experience and a more privacy-conscious and user-friendly solution, saving them time and money and improving their experience.
It is easier to embrace this shifting approach than ever before with the help of AI-driven marketing platforms such as Releva, a deep-tech personalization solution for innovative eCommerce.
Their partnership with Google in the Google for Startups Accelerator: AI First program underscores Releva’s expertise and unique capabilities in personalization and multichannel communication.
The company delivers impressive results, including saving clients 8+ hours per week on repetitive marketing tasks, achieving a remarkable +40% average revenue boost for ideal customer profiles, a remarkable +50x ROI, and doubling purchases from Facebook and Instagram traffic. Additionally, Releva’s approach doubles email retargeting revenue and significantly reduces Facebook and Google ad retargeting costs while maintaining top-notch delivery rates and pricing.
As we move towards a cookie-less world, the path to eCommerce success becomes clearer. AI-based platforms like Releva offer comprehensive solutions for growth and enhanced customer communication, making adaptation a promising journey into the future. Welcome to the era of personalized, user-friendly, and privacy-conscious eCommerce.
The article contains professional expertise from Georgi Georgev, CEO and co-founder of Releva. Georgi is a senior product and technical leader with more than 20 years of experience in product strategy, software engineering, big data, and machine learning. He has built successful AI & Data platforms that are used by millions of users. Georgiev holds a PhD from Sofia University and a Global Executive MBA from the Instituto de Empresa (the IE).
Currently, Georgi is the CEO at Releva, an innovative startup developing an AI-powered platform dedicated to improving customer journeys and achieving eCommerce growth. The company provides a marketing automation platform that personalizes the website and the multichannel to increase conversion rates, average order values, customer lifetime values, and leads to revenue growth with an amazing ROI. Releva’s mission is to help merchants build and nurture stronger connections with their customers through AI-powered marketing automation, personalization, and omnichannel communication.