Last year personalization was a driver of innovation in eCommerce, with AI-powered product recommendations, image recognition technology, and personalized search enhancing the customer journey.
2023 will see personalization in eCommerce continue to evolve, but this time the main areas of development will be driven by data privacy issues and marketers’ reactions to it.
In recent years, access to data has become more democratized within businesses. Ecommerce professionals have learned that the way to achieve genuine personalization is to remove data silos, and the technology is there to make this a reality. Today’s best-of-breed commerce systems make a point of integrating their data, providing advanced analytics and rich detail to marketing and business teams.
But with this increase in the amount of personal data held by companies, and the relative ease of access to it by multiple teams comes questions about the privacy of your customers.
This is all in the context of increased regulation. GDPR continues to be adopted beyond the borders of the European Union and CCPA is due to come into force on January 1, 2023. Indeed, Gartner expects that by 2024, 75 percent of the global population will be covered by data privacy regulations.
This increased focus on privacy is prompting online brands to respond: there has been a big expansion in the number of companies that have a data privacy or compliance officer, and the budgets of privacy programs have increased substantially.
AI and data privacy
Last year we predicted AI would play an increasingly important role in personalization, and that has proven to be the case. This year, the role AI plays in providing personalized experiences will come under increasing scrutiny from regulators and authorities as concern grows for how this innovative technology handles consumers’ personal information and feeds it into wider data-gathering and decision-making processes.
As the commercial application of AI in areas like eCommerce is still in its infancy, data best practices and privacy laws are playing catch-up with the industry. But given the spotlight on data privacy in general, consumers and governments will soon expect brands to incorporate oversight of AI data handling into their data compliance processes and standards.
Online retailers who can offer customers a simple and unambiguous way to check what data a company holds on them and how they use it will have a competitive edge when it comes to building and maintaining trust in their brand.
Monetate Personalization takes a unified approach to data, AI, and personalized experiences. Our user-friendly dashboards make it easy for teams to see what data is being collected and how it’s being used.
A big trend of the last few years has been the widespread adoption of an opt-in model of data usage, where sites and companies are obliged to gain the explicit consent of visitors before using their data.
This trend is set to deepen in the coming year with the rollout of GDPR and CCPA. Marketers should welcome this: customers have shown themselves happy to share their data, as long as they can see a clear benefit from it. Rather than see this as a threat to business models, online retailers should view it as a way to build trust and brand loyalty with their customers.
Another aspect of the heightened awareness and tightening protocols around privacy is the treatment of cookies. Cookies have been around since 1994 and are a basic part of how websites remember session behavior.
But more recently, concerns have been raised about third-party cookies, or trackers, which gather data on browsing habits for someone other than the site owner. These types of cookies, often used by advertising and marketing companies to track users’ general internet browsing behavior, have come to be seen as a violation of users’ privacy.
Google had previously announced that they would stop the use of third-party cookies in 2022, but have since delayed the ban twice (although Firefox and Safari have already started blocking them). They’re now scheduled to end support in 2024, citing the need for more time to develop alternatives.
This is an issue for brands who wish to create digital experiences tailored to individual site visitors as the creation of such experiences often relies on logging behavior during visits. Even though this type of tracking is confined to the user’s session within a particular site, it is still in many cases considered a form of a third-party cookie and so usage is being increasingly constricted.
To meet this challenge, and to comply with customer expectations around privacy, an augmented approach to the generation of personalized experiences will be required in 2023 and beyond.
This new approach has been called cookieless personalization, as it uses indicators like:
- Geographic location
- Time of day
- Page-specific behavior
- Time of year
- Local weather conditions
These contextual pieces of information, sensitively and intelligently used, can create powerfully personalized experiences.
In 2023, the gathering and use of first-party and zero-party data will become more important than third-party data in personalization. Data that comes directly from your customers and that they have willingly shared with you is more valuable than third-party data and can be used to generate truly individualized experiences.
Monetate Personalization combines first-party data with in-session behavior and out-of-the-box targets so you can achieve 1-to-1 personalization at scale. Creating these unique digital experiences not only satisfies the personalization needs of consumers but also uses their data sensitively and transparently.
Mobile personalization trends
Away from data privacy issues, the other big trend to watch for in 2023 will be on mobile. Already, we’ve moved to a mobile-first internet, with more and more retailers’ traffic and sales coming through m-commerce.
One of the most significant areas of mobile shopping in 2023 will be social commerce, which is the name given to the interaction of social media platforms and eCommerce. Platforms like Facebook, Instagram, and TikTok all facilitate shopping directly on their platforms.
This fast-growing market is a huge personalization opportunity as it allows brands to connect with customers in a familiar environment that they love spending time in, and serve content and messaging in line with their social media feeds.
Move to a more sophisticated personalization model for 2023
This year will see an increasing awareness of issues around data privacy and security, as well as a changed approach to how brands gather and use customer data.
These developments bring challenges and opportunities for eCommerce brands. Online retailers who are willing to embrace these changes will be rewarded with more sophisticated, individualized digital experiences, built on richer, intentionally given, more meaningful customer data.