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3 major privacy challenges for retail & ecommerce brands

Learn the top three privacy challenges that impact digital marketing success for retail and ecommerce brands.
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In the fast-paced world of e-commerce, retail, and direct-to-consumer sales, the race to capture consumer attention has never been more competitive—or complicated. I recently attended the Shoptalk conference in Vegas for ecommerce, marketing, and digital leaders. Two of the biggest themes across conference discussions and sessions were: 

  • Personalization, personalization, and oh–more personalization. Especially when it comes to leveraging AI, marketers are hungry for best practices and quick wins for using AI to personalize the consumer experience and journey. 
  • Loyalty programs are king. With the death of third-party cookies in sight, brands are conscious of the need to form long-term relationships with consumers as a route to collecting more first-party data. Across the board, loyalty programs are a major vehicle for driving this brand retention and personal connection.

Amidst this fervor to personalize shopping experiences and streamline digital journeys, there’s a real hurdle that not enough marketers and digital leaders are talking about: data privacy. For even the most savvy of digital leaders, data privacy compliance is treated as less-than. An ugly duckling that we leave to the legal department to figure out. 

The harsh reality is that bad data privacy has a real impact on your customer journey, experience, and ultimately revenue. Buckle up as we dive into the three biggest privacy challenges that are limiting e-commerce, retail, and direct-to-consumer companies from total digital success—and how you can turn these obstacles into opportunities.

Three digital privacy challenges for retail and ecommerce brands

‍What are the main privacy concerns in ecommerce and retail?

‍Retail and ecommerce brands face three key data privacy challenges: 

  1. Designing a seamless cross-channel shopping experience 
  2. Acquiring and activating more first party data
  3. Optimizing your website for maximum conversions

Overcoming these challenges requires a blend of technological innovation, transparent communication with consumers, and cross-functional collaboration to create a balance between privacy protection and personalized user experiences in the digital marketplace. 

Let’s look at these three challenges in detail.

1. Designing a seamless cross-channel shopping experience 

Imagine stepping into a virtual store where the shopping journey feels more like a wild goose chase than a pleasant stroll down the aisles. Frustrating, isn't it? Recent data indicate 60% of consumers will abandon ecommerce websites due to a poor shopping experience. And here’s the kicker—almost 90% of these folks are willing to throw more coin at a shopping experience that doesn't make them want to pull their hair out, craving one that's quick, seamless, and feels like the store knows them personally.

Your frontend data privacy program–read: cookie banner setup and experience–is more important than you think to the optimal shopping journey. Here’s what you need to consider: 

  • Can you recognize consumers’ identities across devices and platforms? Ever felt like you're having to reintroduce yourself every time you walk into a room, even though you've been there a dozen times? That's the vibe customers get when they hop between devices and platforms only to find that the cookie banner pop-up has developed amnesia. Not only does it disrupt the shopping experience, but it also makes bounce rates go up as customers get fed up with pop-ups and bounce out. At Ketch, we call this our “identity graph” – robust identity management to identify and correlate user IDs across types and devices, making sure we recognize them everywhere they experience your brand. 
  • Is your old school cookie banner tag slowing page speed? In a world where patience is as thin as a low-battery iPhone at the end of a long day, the need for speed is real. 53% of mobile web users will abandon a website if it takes more than 3 seconds to load. Most technical SEO gurus and digital leaders are familiar with the exercise of tracking down the culprits of slow page load times. Legacy cookie banners often have bloated tag infrastructure, not designed for modern website performance expectations. 
  • Do you have the right data permissions for AI personalization? eCommerce brands are rightfully excited about new AI solutions that promise greater personalization, but need to be cognizant of the AI, privacy and security regulations that govern responsible AI usage. It's a balancing act between harnessing the power of AI for hyper-personalization, and not tripping over the regulatory red tape that could turn that dream into a nightmare. With the right solution, you’ll be able to identify permissioned data sets to feed your AI models and LLMs. 

Navigating these challenges requires a few things, namely savvy technology choices and cross-functional collaboration across digital, marketing, and legal teams.. It's about creating a seamless tapestry of shopping experiences that recognize and remember the customer, no matter the device or platform, all while keeping the loading times swift and the personalization on point.

"Our internal team is small. We need to balance privacy program management with many other initiatives. Using Ketch makes data privacy compliance much easier."
Kristie White, Director of Ecommerce Operations, Francesca's

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Keep reading: 

2. Acquiring and activating more first party data 

In the bustling marketplace of digital commerce, a new currency is king: first-party data. As the desire for tailor-made shopping experiences soars, the reliance on old-school, third-party data is waning. This shift places your website front and center as a goldmine for enhancing customer experience (CX) and propelling revenue growth. This critical strategy includes its own set of potential privacy traps.

  • Is your cookie banner on-brand, with transparent consumer-facing language? From a marketer's perspective, one of the primary goals of a cookie consent banner is to maximize consent rates for various “purposes.” A purpose = what you’re allowed to use data for, such as personalization, analytics, or advertising. When cookie consent banners are a) full of legal language that’s hard to understand, and b) inconsistent with the website look and feel, consumers are more likely to ignore them or decline consent. Without consumer consent to use their data for these various purposes, you’ll have limited ability to acquire and activate this data. An on-brand, transparent privacy consent experience is essential to first-party data collection.
  • Do you have a strategy for the impending cookieless future?  As the digital world evolves, the trusty old third-party cookie is getting the boot, with major browsers phasing them out. Despite this sea change, a surprising number of marketers are still betting big on strategies heavily reliant on these cookies. The challenge here is to pivot, to find new ways to gather and leverage first-party data, ensuring that personalization doesn’t take a backseat as privacy standards tighten.

Keep reading: Navigating a cookieless future with Google Privacy Sandbox

  • Are you maximizing your preference center? Deep within the mechanisms of e-commerce operations lie the preference centers, designed to be places where customers can specify their interests and communication preferences. In reality, these old preference centers don’t generate high engagement (<1% of website traffic is common). Brands need a new approach to capture relevant consumer interests, subscriptions, and channel preferences. And in tandem, brands need a solution to update those preferences across the various martech and adtech systems that house consumer data. This is the route to activating permissioned data in personalized communications and campaigns.
  • Do you know what data you can use, for what purposes? One of the thorniest challenges in this data-driven landscape is understanding data permissions. It’s one thing to collect consumer consent–it’s quite another to actually map those consent choices to your martech and adtech systems. It’s like having a treasure map but not knowing if you’re legally allowed to dig for gold. This uncertainty can cripple marketing and growth initiatives, as teams are hesitant to use data for fear of crossing privacy boundaries.

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Thriving in the era of first-party data requires more than just a change in tactics; it demands a shift in mindset. It’s about viewing your website not just as a storefront, but as a dynamic platform for building deeper customer relationships through data. By addressing the challenges of consent management, preparing for the cookieless future, rejuvenating preference centers, and ensuring clarity around data permissions, brands can unlock the full potential of their digital efforts.

3. Optimizing your website for maximum conversions

In the digital shopping realm, your website is the main stage, the spotlight where every click can lead to a standing ovation or a silent auditorium. Yet, many e-commerce platforms are playing to less-than-full houses, with conversion rates lingering below the industry standard of 3.6%. The culprits? Slow loading times, overzealous consent banners, and data capture prompts that miss the mark, all conspiring to turn an audience of eager shoppers into a crowd of bounced sessions. To ensure your website gets the applause it deserves, let's address the backstage issues hampering your performance.

  • Is your legacy consent management platform affecting page load? Historically, consent management platforms (CMPs) prevented the loading of website content until the CMP could identify user location and present the accurate privacy experience. This process, when not optimized, can delay the loading of website content by several seconds which significantly increases bounce rates. After all, when a user visits a website they expect to engage with your content, not sit idly while legacy privacy software "assembles" the right privacy experience.
  • Are you asking visitors to repeat their preferences to you? Here’s how to turn your website's guest book into a ghost town: ask your visitors to scribble down their preferences every single time they cross your digital doorstep, regardless of the device they're using. Intrusive and redundant data capture prompts, which are a symptom of a poor identity management solution, alienate users and spike website bounce rates.  And even more important: when you receive these preferences, don’t just lock them in a box. Connect them to your downstream data systems to actually tag data with the permissions for use that you’ve been granted by the consumer. 
  • Do you know all of the trackers, pixels, and tags running on your website? Your website might be unknowingly hosting a troupe of trackers—cookies, pixels, beacons—each capable of spotlighting your users without their consent. This not only raises privacy curtains but can also weigh down your site’s performance, stretching loading times and sending bounce rates off the charts. A comprehensive tracker/cookie scanning tool–not just cookies, but EVERY type of tracker–is essential to visibility and compliance. 

Optimizing your website for conversions means more than just tweaking the lights and sound; it's about ensuring every part of your digital theater works in harmony. Streamline your consent processes, make data preferences meaningful and persistent, clear the stage of unnecessary trackers, and embrace solutions that recognize and respect your audience’s choices. With these adjustments, your website can deliver a performance that not only captivates but converts, turning every visitor into a loyal fan.

For retail and ecommerce companies, privacy challenges must take center stage 

The digital world is ever-evolving, and with it, the complexities of maintaining privacy while ensuring an exceptional user experience. The challenges are many, but so are the opportunities for those brave enough to tackle them head-on. By addressing these three pivotal areas—seamless shopping experiences, first-party data utilization, and website optimization—you're not just overcoming obstacles; you're setting the stage for success in the digital marketplace.

With the right strategy, tools, and cross-functional collaboration, these privacy challenges can transform from annoyances to opportunities. So let's roll up our sleeves, dive into the data, and turn these privacy challenges into your competitive edge. Welcome to the future of e-commerce—a future where privacy and personalization coexist to support your digital marketing goals. 

Read time
7 min read
Published
March 28, 2024

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