This piece originally appeared as a Retail Touchpoints post.
Google’s announcement earlier this year regarding “Topics” — its more privacy-sensitive solution to FLoC, or Federated Learning of Cohorts — shouldn’t be a surprise for any retailer following trends in digital marketing. The company’s move to become more privacy-compliant falls squarely in line with where everything is going. Marketers are tasked with identifying new ways to gather highly valuable information about potential customers as consumers and government regulators push back against traditional online tracking practices. Retailers are thus turning to a new source of customer data because of this: zero-party data.
How Does Zero-Party Data Differ from First-Party Data?
Unlike first-party data — data provided by customers on a retailer’s website without explicit consent, such as purchase or browsing information — zero-party data is information that consumers voluntarily provide the retailer in exchange for some type of incentive or reward, like a better offer, elevated experience, or premium service.
Zero-party data provides a more accurate depiction of a consumer because, compared to first-party data, it doesn’t require the retailer to do analytics or append data to understand the consumer’s intent. With zero-party data, there’s no need to speculate; you simply ask shoppers questions, and they provide answers to access value. Below are examples of three DTC retailers that are using zero-party data in different ways to attract, acquire and retain customers.
ThirdLove: Using Surveys to Drive Purchases and Inform New Products
ThirdLove, a DTC apparel retailer, gathers zero-party data with an approach that invites consumers to share information about themselves. The company asks shoppers to fill out a survey where they can share information that accurately drives ThirdLove to recommend the best-fitting bra.
For example, depending on how the customer has answered earlier questions, they may be asked if they have lost or gained weight. Because a shopper knows their answers will lead them to a perfectly-fitting product, they’re more willing to provide the personal information required.
ThirdLove also uses this zero-party data to help guide key business decisions. In one case, the company built an internal algorithm that uses data gathered from the surveys to inform supply chain decisions, such as how to manage inventory of particular sizes. It also helps ThirdLove understand how size trends change over time.
Shea Moisture: Contests and Cash are King
Shea Moisture, a hair and skincare company, runs contests to acquire zero-party data from consumers. In addition to encouraging shoppers to take a quiz that will lead to better product recommendations, the company gives shoppers the option to provide personal information — such as email address, zip code and birthday — for a chance to win $100 off any order. In essence, the company is paying the shopper to provide them with valuable zero-party data.
ASICS: Zero-Party Data is the Secret Sauce for Its Customer Loyalty Program
Other companies take a different tack at gathering zero-party data. As part of its OneASICS loyalty program, ASICS offers discounts to specific customer communities, including first responders and medical professionals. To qualify for the discount, the consumer simply enters their name, email address and the name of their employer in order to prove they are a member of the community.
ASICS combines this zero-party data with first-party data — such as purchase information gathered on its site — to get a 360-degree view of customers across all of its DTC channels and platforms. This data allows ASICS to deliver one-to-one content experiences for customers logged into the website or mobile app. The program has been remarkably successful. When the company launched OneASICS, membership and loyalty members accounted for less than 10% of all ASICS purchases. Today, that number is over 50%.
There are myriad ways to incentivize consumers to provide you with information about themselves, which you can then use across the business — whether you are incorporating zero-party data into your ad models and direct marketing campaigns or informing what products or services you bring to market.
What we’re learning together is that many customers are thrilled to share personal, zero-party data with retailers that offer something of real value in return. And with more restrictions on the use of third-party cookies sure to materialize in the future, now is the time to make zero-party data the cornerstone of your marketing mix.