User provides data to a business on a computer, while holding a credit card

Data collection and analysis are key elements of all e-commerce business operations. After all, you need to collect data to understand your target audience, market to it successfully, and create products that your customers want or need. However, gathering just any data is no longer enough to get the job done. Instead, your brand should be looking into zero-party data. If you’re not sure where to start, read on. We’ll break down what zero-party data is and how it can boost your e-commerce business in 2022 and beyond.

What Is Zero-Party Data?

Zero-party data is also called explicit data. In a nutshell, zero-party data is any data that a customer shares with a company or brand intentionally and proactively. It can include purchase intentions, context, preferences, and permissions (such as signing up for newsletters, for example)..

It is best understood by contrasting it with other types of data. For example:

  • First-party data is any app or site-wide/on-page behavior. It includes clicks, scrolling, time spent on the page, and more. First-party data is useful for understanding a visitor’s interests or shopping intent. Note that first-party data also includes transactional data like purchases and downloads.
  • Third-party data is obtained from sites or apps that your brand does not own. It can include buying signals, demographic information, and other CRM or POS software data points.

The best way to collect zero-party data is by asking customers to register for your e-commerce site, mobile application, or newsletter. Once registered, you can then ask consumers about their preferences and wants.

Be sure to sweeten the deal for registration, such as offering a coupon for a consumer’s next purchase, education in the form of a free ebook, or requiring registration for a consumer to get free shipping/join your e-commerce store’s forum or online community.

The Benefits of Using Zero-Party Data

Zero-party data is much more important than in previous years. Why? Primarily because of the increased focus on consumer privacy. Legislation such as the European GDPR and California’s CCPA now require companies to have strict policies regarding consumer privacy, information collection, and data safeguarding. 

For example, these legislation pieces require browsers and even new blogs to allow users to opt out of cookies and tracking. Furthermore, if cybercriminals steal data in a surprise cyberattack, companies now face stiff penalties for failing to have adequate safeguards 

Put simply, the old means of data collection and storage are being phased out because of new concerns regarding data privacy and organization. Zero-party data is beneficial because:

  • It is always provided to your company by consumers, being “opt-in” by default.
  • It is definitive and trustworthy relative to other data types. Why? It comes straight from the source, not from other software or organizations. While not everyone accurately self-reports, it’s still relatively reliable for personalization, consumer avatar creation, and other objectives.
  • It can change with shifting consumer tastes and ideas. Consumers rarely stay the same forever, and your brand can continue to maximize its value to its target audience by taking zero-party data into account.

Successful e-commerce businesses will want to lean into zero-party data collection and analysis sooner rather than later.

How To Leverage Zero-Party Data for Your Brand

There are multiple ways to start using explicit data for your e-commerce business. Let’s look at a few specific examples.

Make Targeted Surveys and Polls

For starters, you can leverage data for personalized surveys and polls. Targeted surveys and polls are much better since they enable you to implement other customized content on your site or online shop.

For example, imagine that a visitor arrives at your online store. There’s a survey with a brief question at the top of the screen that appears when a visitor checks out for the first time. The survey asks a question about what the consumer wants. 

Upon answering, your site automatically directs them to guides or products perfectly tailored to their needs. This is an example of combining zero and first party data together, with the survey being an example of collecting zero-party data, and the customer behavior on your site while browning your products (clicks, time spent on the page, and so on) an example of first-party data.

This is responsive, personalized, and can go a long way toward helping your target audience members feel recognized and appreciated by your brand. In doing so, your business can become more relevant to members of your target audience.  

Use Targeted Advertising

Next, your e-commerce business can use targeted advertising through zero-party data collection. Targeted marketing is always better than generalized marketing. Every marketing dollar spent should be focused on attracting your target demographic and converting visitors.

Through survey answers and other data points, your brand marketing team will:

  • Better understand your target audience, including their desires, needs, and worries
  • Be able to create better marketing content that speaks to your target audience
  • Avoid creating marketing content that seems out of touch with your followers

Targeted advertising can include personalized ads, such as those that use your customers’ names, such as via email marketing ads or sending them personalized SMS messages. However, it also means creating other types of marketing content, such as video or PPC ads that speak directly to your target consumers’ tastes and needs.

Offer Customized Deals and Product Recommendations

Lastly, you can leverage zero-party data for e-commerce personalization. You can offer lots of great things to your consumers through personalization, such as:

  • Customized deals, like coupons or gift cards for products you know a given customer likes
  • Special product recommendations

Conclusion

A combination of zero, first, and third party  data is the future of understanding audiences. It’s personalized, comes straight from customers, and neatly avoids any issues with privacy legislation like the GDPR. Thus, brands like yours can continue to receive international business from target consumers and gather data that helps with marketing, product creation, etc.

Nahla Davis
Nahla Davies is a software developer and tech writer. Before devoting her work full time to technical writing, she managed to serve as a lead programmer at an Inc. 5,000 experiential branding organization whose clients include Samsung, Time Warner, Netflix, and Sony.

Categories: Small Business Advice