Consumer data privacy laws like GDPR and CCPA are making it easier for consumers to control what companies do with their data. And major corporations like Apple and Google are getting ahead of the trend towards a privacy-first web by doing away with third-party cookies. That presents a challenge for ecommerce brands that have relied on third-party data to grow. So ecommerce marketers are shifting their focus to owned channels where they can use zero- and first-party data to grow their businesses.

But what exactly are zero-party and first-party data? And how can you collect and use them to scale your brand? Let's dive in.

What is first party data?

First-party data refers to any data a brand collects directly from customers and website visitors. This could include online purchase histories, contact information, browsing activity, demographic information, and more.

Unlike third-party data, which is gathered from external sources like data brokers, first-party data is more reliable and directly owned by the brand.

What is zero party data?

Zero-party data is a subcategory of first party data. It refers to any information a customer intentionally and voluntarily provides to a brand. According to Forrester, who coined the term in 2018, zero-party data "can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize [them]." So, think things like email address, pets a customer owns, or hair type.

What's the difference between zero party data and first party data?

Zero-party data is technically a subset of first-party data, but distinguishing between the two will be important for designing a customer experience that uses both.

Zero-party data refers to the information consciously and explicitly given to the brand by customers. While first-party data also includes observed behaviors like browsing, clicking, adding products to a shopping cart, and purchasing.

First-party data needs to be analyzed in order to draw meaningful insights and optimize marketing campaigns. Zero party data provides context to a customer's behavior and adds details that might be hard to infer from first party data alone, like preferences and purchase intentions.

The benefits of zero and first party data collection

Collecting zero- and first-party data is critical for ecommerce brands to create better experiences and more targeted campaigns.

Personalized marketing campaigns

Zero- and first-party data allow brands to create detailed customer profiles. Then they can launch personalized marketing campaigns that resonate with the customers who receive them.

For example, if a shopper adds a product to their cart and doesn't purchase it, that's behavioral first-party data. Using that, you can send an email or text offering more education on that product or a discount to encourage a purchase.

Furthermore, you can combine zero-party data with first-party data to enhance your abandoned cart automations. For example, let's say that the same customer took a product recommendation quiz that led them to add that item to their cart. In that quiz, they said they were shopping for gifts for others.

Now, instead of a generic abandoned cart message, you can leverage zero-party data to personalize the message with gift-giving copy and imagery.

More reliable than third party data

Because zero- and first-party data come directly from customers, it's more reliable than third-party data. Because you're collecting it instead of buying it from a data vendor, you can ensure that it's up-to-date and accurate. Matt Rosenburg, former CMO of ChoiceStream, said that data providers could have misguided intentions in the name of scaling, harming data quality. "If you can get 300,000 people in a group with 95 percent confidence that they belong there, or 30 million people in a group with 60 percent confidence," he said, "Well, it might not be such a hard decision to relax your model a bit, especially when no one is set up to audit you."

So relying more on zero- and first-party data, ecommerce brands can trust that the insights they glean from this data are trustworthy and will help them make better marketing decisions.

Transparency builds trust

Brands that are transparent about collecting customer data will be more successful in building customer trust. By providing clear opt-ins to first-party cookies, email and SMS subscriptions, and preference centers to manage communications, they won't mind hyper-personalized messages.

They know what information they've given you and know they're in control of what you know about them. This is foundational to building personalized customer experiences that feel good for customers to receive.

Collecting customer data

Now you know the benefits of collecting zero- and first-party data. So here's what to collect and how to fuel more effective and personalized marketing campaigns.

What kinds of customer data should ecommerce brands collect?

You should collect data whenever and wherever you can. The more you collect, the better. But focus on the data that's most relevant to your brand and products. This can include:

  • Behavioral data: browsing history, clicks in emails and texts, add to carts, purchases, etc.

  • Demographics: age, gender, location, income, etc.

  • Interests and hobbies: home decorating, travel, pets, cooking, health, etc.

  • Values: environment, family, human rights, etc.

  • Preferences: how often they want to receive communications from your brand, what kind of content they want to receive, on what channels, etc.

How can ecommerce brands collect first- and zero-party data?

First-party data like behavioral insights can be collected through the software stack you use for your owned channels: your ecommerce platform, email software, SMS software, analytics tools, CRM or customer data platform, and more. To gather first-party data and activate it across channels, make sure your tools are well-integrated so they can share data between them.

You can collect zero-party data from customers directly in a variety of ways on your owned channels. Consider trying these strategies for collecting zero-party data:

  • Product recommendation quizzes: Here, you can gather helpful details for immediate recommendations and future marketing campaigns like hair type, age, skin concerns, or recent life events.

  • Email and text opt-in forms: Beyond contact information, you can gather essential information on subscriber opt-ins. Like what gender apparel a customer wants to hear about or their birthdate.

  • Customer surveys to your subscriber list: Like product-market fit, product feedback, or customer experience surveys.

  • Conversational popups: Engage customers in real-time as they browse your site based on the actions they've taken

  • Post-purchase surveys: 1-2 questions on the order confirmation page to ask about their shopping experience or how they discovered your brand

  • Preference centers: Have a way for customers to manage their communication preferences and opt in or out of specific types of communications.

  • Product reviews: Beyond providing social proof to other shoppers, a customer's rating of your product can help you make better product recommendations in the future.

Build a marketing strategy centered around zero and first party data

As the trend towards a privacy-first web continues, it's essential for ecommerce brands to embrace zero- and first-party data to stay competitive. By collecting and activating the data you have access to, you can create more personalized experiences for customers that will keep them coming back for more.

Now that you know what data you want to collect, read up on 13 marketing strategies DTC brands can use to grow. Spoiler alert: Your zero-party and first-party data will come in handy here!