Why Zero-Party Data Is Becoming Essential for Ecommerce Growth

Why Zero-Party Data Is Becoming Essential for Ecommerce Growth

Want to know what your customers actually want?

Ask them. Literally ask. Not what you think they want. Not what some tracking cookie inferred they want. Ask them what they want.

This is zero-party data.  It's rapidly becoming the most precious data your ecommerce store can have.

Here's the problem:

Third-party tracking is diminishing annually. Privacy regulations are becoming more stringent. Consumers are becoming increasingly selective about who they allow into their lives. "Follow them around the web" is no longer a viable strategy.

If you don't ask, you won't know.

The good news? Collecting zero-party data is simple once you know where to start.

Ready? Jump in...

Inside this guide:

  • What Is Zero-Party Data?

  • How A Client Onboarding Form Collects It

  • Why Zero-Party Data Drives Ecommerce Growth

  • 4x Ways To Turn Zero-Party Data Into Sales

What Is Zero-Party Data?

Zero-party data is information a customer shares with a brand on purpose.

Termed by Forrester Research. It includes product preferences, sizes, budgets and why someone is shopping in the first place.

That is different than first-party data. First-party data is behavioral observation - clicks, page views, past purchases. With first-party data you still have to infer what the shopper is looking for.

With zero-party data... there's no guessing.

The customer just tells you.

Pretty cool, right?

How A Client Onboarding Form Collects Zero-Party Data

The first signup screen is the simplest place to begin capturing zero-party data.

A client onboarding form gets new customers answering a few quick questions right when they sign up. What are they shopping for? What style are they into? How frequently do they purchase? Building an intelligent client intake form with conditional questions ensures each customer only answers relevant questions -- and your client onboarding form turns into a consistent stream of clean, first-party preference data.

Here's how to make it work:

  • Keep it short (3-5 questions is plenty)

  • Offer something in return, like a discount or tailored product picks

The second point is the big one.

Customers love giving you information if they receive something valuable in return. Request their skin type and display relevant moisturisers. Request their size and only display clothes that will fit them. Everybody wins.

Why Zero-Party Data Drives Ecommerce Growth

So why is every smart ecommerce store suddenly paying attention to this?

Four reasons.

Shoppers Expect Personalisation

Generic emails and random product suggestions don't cut it anymore.

McKinsey reports that 71% of consumers expect companies to provide personalized interactions. When they don't, 76% feel frustrated.

That's a lot of frustrated shoppers...

And frustrated shoppers don’t shop. They walk out of your store (or website) and go to a competitor who “gets” them. But you can’t personalize anything without good data. Zero-party data is the most accurate fuel you can put in that engine.

Trust Is The New Currency

Here's something most store owners don't realise...

Privacy matters because it affects revenue. Cisco found that 75% of consumers won't purchase from companies they don’t trust with their information.

More specifically, 49% of respondents aged 25-34 have already switched providers over privacy policies.

Zero-party data solves this dilemma. The customer gets to decide what they share. They understand precisely why they're sharing the information. No surprises happening behind the scenes.

That builds trust instead of breaking it.

Cookies Are Crumbling

Browser controls, App Tracking Transparency and privacy regulations continue to erode third-party data. Each update further limits the ability to reach consumers based on their activity elsewhere on the internet.

Stores that rely on rented data are building on sand.

Businesses who collect first party zero-party data are building on bedrock. It cannot be turned off. It can’t be taken away from you.

Better Data = More Revenue

This is where it all pays off.

McKinsey discovered that companies which grow faster are delivering 40% more revenue from personalisation than slower growing organisations. Good data equals better personalisation. Better personalisation equals more sales.

It really is that simple.

Think about it this way:

When a shopper tells you they have oily skin, are on a small budget and love fragrance free products they are practically giving you their shopping list. All you have to do is show them those products when they need them. No guesswork. No wasted ad spend. Just good old-fashioned right person. Right product.

4x Ways To Turn Zero-Party Data Into Sales

Gathering the information is only half the battle. Now you have to USE it.

Here are four simple ways to do it.

Product Recommendation Quizzes

Quizzes are fun, fast and ridiculously effective.

The shopper answers questions about their needs. quiz directs them to appropriate products. You learn about their wants. They receive a customized solution. Everyone wins.

Plus, quizzes help reduce returns since customers are buying items that are right for them.

Preference Centres

A preference centre lets customers choose what they hear about and how often.

Some customers want daily deals. Some customers only want to see new products in a single category. Allow them to choose! This way your email newsletters stay desired and not dreaded -- and hey, your unsubscribe rate goes down too.

Post-Purchase Surveys

The moment right after checkout is golden.

Make sure your customer is smiling. They just gave you their hard earned money! Ask one or two rapid-fire questions such as:

  • "Who is this purchase for?"

  • "How did you hear about us?"

This provides answers on what motivated purchases, gift buying occasions and effective marketing channels.

Personalised Email Segments

Now bring it all together.

Segment your email list into intelligent groups based on your customer onboarding form responses, quizzes and surveys. Email dog food promotions to pet parents. Email winter apparel to users who said they ski.

Relevant emails get opened. Relevant emails get clicked. And relevant emails make sales.

Data gathering tip: Don't gather data you won't use. Tie every question you ask to something you'll actually do as a result. A segment you can place them in, a recommendation you can make, or a better offer you can present. If you can't tie it to action, delete it.

The Bottom Line On Zero-Party Data

Zero-party data isn't a trend. It's quickly becoming the foundation of ecommerce growth.

Consumers crave authentic experiences. They also crave ownership of their data. Zero-party data is the only dataset that delivers both simultaneously.

To quickly recap:

  • Start collecting preferences with a short client onboarding form

  • Offer real value in exchange for every answer

  • Add quizzes, preference centres and post-purchase surveys

  • Turn the answers into personalised emails and recommendations

  • Rinse and repeat

Stores that ask questions today will capture customers tomorrow.

So start asking!