Ad Tech
June 27, 2022

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How First-Party Data Drives Loyalty

Today, anything can be bought online and shipped directly to your home. However, data privacy has become a growing concern for online shoppers in recent years. No one is comfortable with the idea of having their personal information collected without permission and sold to advertisers for ads that may not even be relevant to their needs.

With new privacy regulation laws being implemented across the globe, companies are slowly but surely phasing out third-party data to help protect user information. While this is a step in the right direction, retailers and brands still require some form of data in order to personalize an individual’s digital shopping experience. Fortunately, first-party data provides the most ideal solution that’s a win-win for everyone involved. It not only gives consumers control over what information they share, but compared to third-party data, it’s more accurate since it’s gathered directly from consumers. This allows retailers to provide the most personalized shopping experience possible.

When strategizing for long-term loyalty, the benefits of first-party data can make a world of difference for retailers. It offers more personalization, allows for more effective targeting, creates opportunities to drive higher engagement, and boosts customer lifetime value and revenue. Here, we’ll discuss the importance of first-party data—and how it can be used to optimize and elevate digital retail loyalty.


What is First-Party Data?

First-party data is personal information that’s collected via direct interaction with users. For instance, if a retail app gathers data about a specific user, they alone may use it to optimize the user’s shopping experience while using the app. Customers can consent to this form of data collection and rest assured that their preferences won’t be sold to a third party. Because they willingly provide their information themselves, it allows data collection to be more accurate.

So, why is first-party data considered a win-win for both the consumer and retailer? While the retailer has direct ownership of the data, the consumer has control over exactly what personal information gets shared. By using the data provided directly from consumers, retailers are able to have deeper insight into their shopping behavior and create tailored campaigns that deliver higher engagement, increased revenue, and meaningful digital connections.

Why Retailers Need to Own Their Customer Data

Third-party data is information collected from various organizations that don’t always have a direct interaction with the customer. Advertisers can buy and sell certain fragments of user information—such as age, gender, annual income, or even marital status— and piece them together without ever establishing a direct relationship with a shopper.

This form of data collection has been around for years, as retailers and brands used them to push targeted ads and improve the shopping experience. However, because third-party data takes different fragments of a person’s information from an external provider, it can provide inaccurate, out-of-date results that are no longer relevant. Additionally, it’s an expensive investment that doesn’t always guarantee the best results. According to Statista, companies spent nearly $22 billion on third-party audience data in 2021 alone. On the flip side, first-party data is free, and also allows retailers to own information that gives a more comprehensive overview of a customer’s preferences.

More importantly, third-party cookies are slowly becoming obsolete. Today’s retailers have a unique opportunity to own their customers’ data with first-party data and drive increased loyalty with customers. There’s no denying that we’re heading for a cookie-less future. Tech giants like Apple and Mozilla Firefox have already banned cookies, while Google announced that it will stop using them by 2023. If retailers and brands want to continue developing an effective retail personalization strategy, they must find the solution that helps them adapt to these inevitable changes—and first-party data is a clear answer. In fact, Merkle’s 2021 Customer Engagement Report stated that 88% of brands are already prioritizing first-party data as a viable solution due to its cost-efficiency and level of transparency.

While third-party data gradually becomes a shadowy figure of the past, it’s clear that first-party data paves a path to a more personalized future—one that leads to higher engagement and longer-lasting loyalty.


Use First-Party Data with a Powerful Retail Media Platform

Swiftly’s robust solutions leverage first-party data to help retailers enrich their digital retail loyalty. All data collected on our platform is based on direct customer interactions, whether it’s through their on-app browsing history or their recent purchases. This establishes a reliable, human interaction with consumers, allowing retailers to deliver a more seamless shopping experience—and create customers for life.

If you’re looking to develop a loyalty program built on trust, security, and accuracy, contact Swiftly today.

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