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Data Privacy In Ecommerce

Data privacy laws continue to develop more as we understand more about shopper privacy concerns. More and more countries become protected by data privacy laws. These laws give the eCommerce world the chance to adapt and grow into a safer place, giving advantages to both merchants and shoppers.

Improved Data Privacy

Data privacy is now the new normal when it comes to eCommerce. Gartner predicts that by the end of 2024, 75% of the world’s population will have their data privacy protected by regulations. As the eCommerce industry continues to grow and shows no sign of stopping, it must evolve as the data privacy regulations do. 

eCommerce companies must understand where to invest, what data and marketing strategies to embrace, and how to communicate this all effectively with their customers. When managed well, these data privacy laws can build trust and increase long term customer engagement and allow revenue growth.

Why Now?

You might be wondering why data privacy laws are increasing so much at the moment. Cyber attacks are a big factor for this; eCommerce is one of the major targets. This has led to customer concerns about the privacy of their activities online when online shopping. Customers will not feel comfortable spending on a website they don’t trust. Having data privacy and explaining your privacy regulations helps to gain customer trust and therefore increase sales.

Shift To First-Party Data

Traditionally, third party data has been the main way that eCommerce companies have gathered data. This used to be the standard, and the policy was in the favor of quantity over quality. New data regulations have changed this.

Third party data is obtained through third-party companies (hence the name). This makes it harder to show proof of, regulate and demonstrate the safety of. In many cases, third party data has been collected without explicit consent of those it collects from. It is for this reason the eCommerce world is moving towards first party data.

Zero party data is even used at times, which comes directly from the customers themselves. First party data is also explicitly consensually given. This means that shoppers know who they are giving their data to and why. This removes privacy concerns.

Ecommerce Personalization

Personalization is now standard practice in the eCommerce world. Most customers expect a personalized experience, however this always used to come through third party data. There are ways of getting around this.

It is possible for platforms to provide personalization at scale through creating click data profiles. These can work for anonymous and first time users, and do not infringe on any data privacy regulations. 

Similarly, if you ask customers what they are comfortable with sharing data-wise, this can also provide personalization without infringing privacy. Through surveys or other systems that ask their input, you can build engagement and regain trust, whilst also offering personalized experiences. In short, consent must always be prioritized. 

Integrating Customer Data Over Platforms

Certain platforms rely on data to be able to run. These include marketing platforms via SMS or emails. In order for this to work, they can form integrations with companies that collect data without any privacy infringements.

Integrations can use data collected from click-profile accounts, to let marketing companies know people’s interests. For example, people who use the website frequently can be targeted in a different way from first time users.

Keep It Clear

One of the main ways to make sure that you retain customer trust is by being as transparent as possible. Record communications you have with them about data privacy, provide personalized offers that apply to them, but do not make them feel uncomfortable. 

Creating specialized offers at specific parts of their buyers journey will help you to obtain more zero party data. This also demonstrates that you can have their trust. There is no greater strategy than one based on trust and communication. 

All About Trust

If there is no trust, customers will simply not shop at your store. It is as simple as that. Consumers feel strongly about buying from brands they trust, so this is where the purchasing power lies. Data privacy is at this stage a competitive advantage. In the world of eCommerce, the stronger your eCommerce strategy the more you will be able to boost sales. 

If they trust that your purposes are valid, they will be open to sharing personal information with you. As long as they know that it will be used and stored securely, they know that it can be in their use to provide their benefits.

Special thanks to our friends at FastSimon for their insights on this topic.
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