Long gone are the days of relying on cookies to piece together a picture of your customer. Browsers now cater to consumers’ privacy concerns by limiting cookie tracking; Apple quickly now has its App Tracking Transparency feature. It’s harder than ever for ecommerce brands to use third-party data to profile who’s visiting their website.
First-party and zero-party data are key solutions to this challenge. By sourcing information directly and voluntarily from your audience, you can build a more accurate picture of who they are. This is gold dust in today’s cookieless world where 81% of consumers still prefer some form of personalized shopping experience despite the obstacles in traditional customer data collection.
“The internet was once one of many selling channels for a retail business,” says Shopify’s director of product Alex Danco. “But that’s history. Today, every corner of a retailer is online, and every customer surface helps paint a holistic picture of that essential question: ‘Who are my buyers?’”
If you’re unsure of the differences between these data types and how you can leverage them for growth, you’re in the right place. Learn how to navigate the new era of customer insights, with data sources and technologies to tap into to learn more about your audience and improve marketing effectiveness.
Table of contents
Understanding first-party data
First-party data is data a business collects directly from its customers. It’s obtained through customer interactions with owned channels such as your website, app, or retail store—and it’s a top priority for 52% of marketers in light of cookie tracking changes.
Examples of first-party data include:
- Website browsing behavior
- Purchase history
- Email sign-ups
- Loyalty program interaction
- Data collected through pixels
The benefits of first-party data are enormous: It offers better targeting since the data is more accurate than third-party cookies. More accurate data leads to greater efficiency—you’re not wasting marketing dollars trying to acquire customers you’ve got the wrong picture of.
Customers also benefit from more personalized experiences that are truly tailored to their interests, browsing history, and pain points. For example, you could enhance the customer experience with targeted emails based on browsing behavior, and offer personalized product recommendations.
For instance, shoppers who’ve viewed your “children’s play mat” category could see an email popup form that offers 10% off a bestseller in that category. Repeat customers who made their first purchase off the back of a free-shipping promotion could receive the same offer again.
Collecting first-party data
There are plenty of ways to collect first-party data:
- User registration: Whether visitors are prompted to add items to their wishlist or register for a “back in stock” notification, customers can provide information about themselves during the signup process.
- Signups through other platforms: You could monitor who opens your Instagram Stories, comments on your brand’s Facebook posts, or clicks your Google Ads campaigns.
- Email and SMS tracking: Track who opens your emails, which links they click, and the time of day they’re most likely to interact. Most email service providers collect this data automatically, requiring no extra legwork on your behalf.
- App usage reports: Mobile apps let you track how shoppers engage with your content, provided they’ve consented to tracking. Track which push notifications they respond to, the time of day they use the app, and pages they visit.
You’ll need a robust customer data platform (CDP) to connect buyer touchpoints across channels and devices. Shopify makes this easy with pixel integrations that unify information you’ve collected from various sources into a customer profile. Whether it’s data from a loyalty app integration or a customer’s purchase history across your online site and retail stores, all of the first-party data you’ve collected comes together in a unique profile.
Understanding zero-party data
Zero-party data is data that a customer intentionally and proactively shares with a business. Unlike first-party data which is inferred from actions, zero-party data is explicitly given.
Examples of zero-party data include:
- Preference center selections
- Poll or quiz responses
- Customer feedback forms
- Social media responses
- Chatbot conversations
- Customer service tickets
Zero-party data offers the most direct insights into customer needs and desires. It also helps enhance trust by showing customers that their preferences and choices matter to your brand. And because zero-party data comes straight from the horse’s mouth, in their own words, you have the unique ability to relay your audience’s needs verbatim in targeted outreach. This can help your brand stand out from competitors’ generic messaging.
Capturing zero-party data
Zero-party data collection can come from a wide range of sources:
- Quizzes and polls: Ruggable has a “Rug Quiz” that asks customers to share the ideal shape, color, and style of their desired rug—all of which the retailer uses to personalize future outreach. Their marketing team found that conversion rates are four times higher if someone answers all of the quiz questions and receives the personalized rug recommendation at the end.
- Surveys: Whether it’s a popup poll that asks website visitors what they’re shopping for or a post-purchase feedback survey, collect zero-party data through targeted surveys.
- Pop-ups. Offer an incentive in exchange for a customer’s email address or phone number. Customize this form to collect more data. For example, baby clothing retailer Mori asks visitors to check which option best describes them: expecting, parent, or gifter.
The most important factor in zero-party data collection is that it feels natural and not forced. Consider attaching it to an incentive, such as personalized product recommendations or discounts. Over half of global consumers say they’re willing to share data with a brand in exchange for this type of tailored experience.
Key differences and synergies
The main difference between both data types is that zero-party data is explicitly provided, while first-party data is inferred from customer behavior. But they shouldn’t be mutually exclusive—they’re best used together for a more holistic view of the customer.
For example, you might use first-party data to identify leads and retarget them through social media advertising campaigns. Zero-party data could supplement your approach—perhaps using responses from a quiz to offer personalized product recommendations in the campaign.
A unified data model is essential to combine both data types to deliver truly personalized experiences. Shopify, for example, collates data from various sources—including previous orders and any app integrations (such as loyalty programs or email marketing apps)—into a unified profile. This gives you a 360-degree view of your customers that allows you to harness the advantages of both data types.
| Data type | Sources | Examples | Use cases |
|---|---|---|---|
| First-party data |
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| Zero-party data |
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Data privacy and considerations
Businesses have a legal and moral obligation to protect customer data and privacy. Companies must be strategic about what data they collect and how they use it, and ensure compliance with regulations when they make data-driven business decisions.
For example, the state of California has recently updated laws concerning consumers’ personal information, and the EU has introduced GDPR legislation to give consumers in the European Union greater control over their data. To ensure you're staying up to date with changing laws:
- Obtain explicit user consent before collecting their data.
- Protect personally identifiable information in a secure CDP.
- Establish a data-governance strategy.
- Write a clear privacy policy that explains how you collect, store, and use data.
- Make it easy for customers to withdraw their consent using tools such as OneTrust or TrustArc.
Leveraging customer data for growth
When combined, zero-party and first-party data enable personalization that goes beyond basic segmentation. You can get more granular not only with who you target, but also what communication you have with each buyer—ultimately improving the customer experience.
The combination of data types also improves ad targeting and reduces overspending on ad platforms. You get better insights into customer behavior, allowing you to proactively anticipate what a customer needs at each stage in the funnel and craft outreach that nudges them further along. No more throwing money at the wall to see what sticks.
Shopify's tools help brands take action on insights, allowing them to create tailored solutions for each segment of their customer base. For example, Ruggable lets customers upload a photo of their room to an AI tool which analyzes the style, color, and existing furniture in a customer’s home. This eliminates the time a customer would otherwise spend typing this information out.
“As we’ve tested different AI tools, we’re already very impressed with the results from the out-of-the-box functionality,” says Ruggable’s director of product management Daniel Graupensperger. “This enables us to keep costs low while helping our customer narrow down choices for a rug that would be ideal for their space.”
VADHAM India also upgraded to Shopify Plus to unlock more granular theme customizations. The Indian wellness brand could now scale their overseas audience with customized pages for new launches in each region—even adding advanced checkout features like personalized product upsells, gifts, and customer testimonials to the world’s best-converting checkout.
The role of technology
Extensible software and a first-party data architecture provide the foundation for seeing around corners and adapting to new privacy and regulatory changes. This infrastructure helps retailers scale data collection and turn their data into actionable insights, as opposed to leaving data sitting in siloed or disconnected systems.
“You start with one channel—you’re selling online or in-person, and then you add additional channels,” explains Patrick Joyce, VP of engineering at Shopify, in a recent interview. “Every time you add an additional channel, you have a new system, so you have a different record of your customer, a different record of your order.
“These brands are spending 80 to 90% of their technical efforts on middleware and connectivity to bridge and sync those together to try to be able to fake a unified experience. That’s a huge amount of effort that’s not going into making amazing experiences for their customers that are unique to their brand.”
Shopify’s unified commerce platform removes patchy APIs and development costs by bringing your tech stack together. Ecommerce and point-of-sale (POS) are built natively on the same platform so all of your customer data feeds back to a centralized repository—without facing the cost of complexity involved in fragmented customer data collection and storage technology. You get a complete picture of your customer no matter where they shop.
Shopify provides a platform to leverage both types of data with tools like:
- Segmentation: Divide your audience into groups depending on traits, behaviors, or preferences they share. Segments are dynamically updated so you can personalize the customer experience in real-time. For example, if a buyer in your “first-time customer” segment makes their second purchase, they’ll be automatically moved to your “repeat customer” group.
- Shopify Audiences: Brands who opt into the Audiences co-op help the algorithm generate buyer behavior insights, but the platform supports data privacy by ensuring that no other business can access another business’s data, or any buyer's data. The Retargeting Boost audience lists inside Audiences helps you find people who’ve engaged with your brand but not yet purchased—and has been proven to drive up to 2x more retargeting conversions.
- Shopify Flow: Automate marketing workflows across different apps and sales channels from your Shopify admin. For example, you could write handwritten notes for orders from first-time customers, or segment customers by lifetime spend to offer them a “thank you” reward for their loyalty.
Blend zero- and first-party data for seamless customer experiences
Zero-party and first-party data are both valuable currencies in today’s cookieless world. Both offer their advantages, and when combined, offer a more personalized approach and better business outcomes—from increased marketing effectiveness to greater customer satisfaction.
The infrastructure that’s housing your data is just as important as the data itself. A unified customer data model combines both zero-party and first-party data for a more complete understanding of your customer. Whether it’s their order history from different sales channels or loyalty program interaction through a Shopify app integration, it all comes together in Shopify’s core data model to paint a complete picture of each individual shopper.
FAQ on zero-party data vs. first-party data
What is the difference between first-party data and zero-party data?
First-party data is collected through interactions you have with your audience using channels such as your website or mobile app. Zero-party data is information explicitly provided by your audience through sources like polls, surveys, or quizzes.
What are examples of zero-party data?
Examples of zero-party data include:
- Survey responses
- Quizzes
- Polls
- Preference center choices
- User registration forms
- Customer support tickets
- Chatbot responses
What is first-party data?
First-party data is information that you’ve collected on your audience through owned channels. Examples of first-party data include purchase history, browsing behavior, email opens, and loyalty program points.
What is the difference between first-party and second-party data?
Data that’s collected from sources you own (such as ecommerce or email marketing platforms) is considered first-party data. When this information has been willingly volunteered by your audience (such as through forms or quizzes), it’s considered zero-party data.
