Is It A Zero Party or First Party? Breaking Down the Difference & Why It Matters

You've probably heard that collecting zero-party and first-party data is critical for growing a brand's e-commerce channel, but depending on who you talk to, it can seem like these terms are interchangeable. One and the same!

But are they? What's the difference?

Zero-Party Data

An easy way to think about zero-party data is that there's no one at the party but the user. In other words, zero-party data is any information a user shares with a company voluntarily.

In practice

• Quizzes: These come in all shapes and sizes. In e-commerce, they're often used to guide users to products, while in the background, the brand can gather more information on its customers. We built a quiz for our client and children's food brand, Once Upon A Farm, that guides customers to products based on their children's needs and preferences.
  
• Email/SMS Forms: Any time you've given your email or phone number to a brand in return for exclusive access, a discount, a free gift, or to stay in the know, you've shared zero-party data!
  
• Post-Purchase Surveys: Following a purchase, some brands will ask customers why they purchased or other questions about their preferences. These surveys are zero-party all the way.

Why does it matter?

Zero-party data is a powerful asset for brands for several reasons. It gives them insights into their customers to better understand who buys their products vs. making assumptions about their target demographic. In addition, they can use this information to create more personalized experiences, whether on the website or through channels like email.

For example, an active lifestyle brand can segment its email list based on customers' activity preferences and only send communication with content and products they're likely to enjoy.

All in all, zero-party data is core to how a brand can build more meaningful customer relationships.

First-Party Data

Unlike zero-party data, companies collect first-party data without users necessarily being aware. It's typically collected via a pixel or piece of code on the company's website and gathers information about them, such as IP address, and their interactions.

In practice

• Abandoned Cart: I'm sure we've all bought something we left in our carts because the brand followed up via email to remind us. If we're lucky, they sweetened the deal with a discount. First-party data at its best!
  
• Smart Product Recommendations: A must-have for most brands selling online is smart upsells and cross-sells. This means showing customers relevant products throughout their shopping journey. Whether in the cart, a product page, or even post-purchase, tools like Rebuy use first-party data to show customers products they're most likely to be interested in buying.
  
• Personalized Web Experiences: If you've ever returned to a website to find it's evolved to fit your interests, first-party data is likely how they made it happen, using a mix of your past browsing behavior, location, and demographic information. Nosto is a solid option for brands looking to personalize their e-commerce site in this way.
  
• Retargeting: When you visit a website once, look at a product, and then feel like the brand is following you across every social channel, we call that retargeting. Retargeting is made possible via first-party data gathered from various snippets of code placed on brand's website from the relevant social channel.

Why does it matter?

It's probably clear from the examples above why first-party data is invaluable for brands. It not only enables brands to personalize their experiences for users, it also keeps the conversation going after they've moved on to another channel.

Go to Both Parties!

While there's clear benefits to both zero-party and first-party data, the real magic happens when they work together. With the correct systems set up, brands can gather all of this customer data into one central platform, like Klaviyo. From there, they can get smarter about meeting customer's needs while also creating more personalized and engaging experiences that will resonate.

In practice

Originally built as a review platform, Okendo has expanded its offering to help brands turn customers into what they call superfans. Their products leverage both zero-party and first-party data to make this happen. Check out my post "The Power of Customer Data With Okendo" on how this comes to life in practice.

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‍This post originally appeared in #66 of The E-Commerce Corner. Subscribe here.