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GUIDE TO NAVIGATING CONSUMER PRIVACY AND RETAIL MEDIA NETWORKS

 * Emily Hunt
 * October 28, 2022



Experts predict that the retail media industry will drive over $60 billion in
revenue by the end of 2024 — nearly triple the amount at year-end 2020. With
this accelerated growth, eCommerce brands are quickly adopting retail media
platforms to monetize and deepen relationships with brand partners. Yet, the
rush to introduce retail media partners leaves eCommerce professionals
struggling with new questions related to data privacy and using first and third
party data. 

With so many moving parts and little documentation to guide them, retailers face
uncertainty in addressing both the legal and practical aspects of managing
consumer data privacy.


CONSUMER PRIVACY: UNCERTAIN LANDSCAPE  



With the deprecation of cookies on the horizon and growing privacy regulations,
first party data has long been retailers’ most powerful asset. Yet, data
security has become pressing particularly with the growth of retail media.
Retailers have collected vast amounts of first party shopper data through
loyalty programs and web purchase behaviors.

The promise of retail media is to activate that very data throughout the funnel.
Retailers, therefore, need to leverage advertising technology from many
different third party vendors to achieve a rapid time-to-market. However, data
shared with outside parties increases the chance of compromising shoppers’
privacy — a risk for even the largest eCommerce brands. Instacart, for instance,
suffered a security incident after two employees working for a third party
vendor viewed more shopper profiles than necessary.

Regulations like GDPR (General Data Protection Regulation) and CPPA (California
Consumer Privacy Act) have stemmed from such issues, as has Google’s
announcement that it will sunset cookies on Chrome.

Without third party data, brands must turn to retailers’ valuable consumer data
to continue delivering targeted, personalized ads. Retailers seeking to monetize
from this opportunity must build a retail media network, which few, aside from
behemoths like Amazon and Walmart, can afford to build in-house. Instead, most
need to team up with a retail media platform, which carries a new set of
challenges related to consumer privacy and compliance.


RETAIL MEDIA PRIVACY COMPLIANCE: 5 GUIDING PRINCIPLES




1. EACH COOKIE IS ONE TOO MANY



Privacy advocates take aim at the cookie for two reasons:

 * Websites and servers can access data on shoppers’ personal devices.
 * Access allows tracking of an individual’s browsing history – not only on the
   same site but across the web.

That’s why European laws require retailers to get user consent for all
non-necessary cookies. Cookies used for marketing purposes (such as retargeting)
are not considered essential, and thus need permissions, which many users
reject.

In the best case, regardless of geography, your adtech partners don’t introduce
or use any cookies. If they come into play, make sure your partner documents
every single cookie and its purpose. This way, your website is transparent about
cookies and asks for user permission when required by law. Since incorporating
the retailers’ own personalization and audience targeting criteria is a best
practice for retail media platforms, additional third party data would bring you
limited benefits. 

Users consent to third party cookies for personalized ads


2. SEEK SERVER-SIDE INTEGRATION



Regulators and shoppers are increasingly suspicious when webpages access
third-party servers, which may profile and collect personal behavior for future
targeting.

To minimize exposing your shoppers’ personal information, integrate third party
technology on the server side as much as possible. When you integrate on the
client-side using HTML tags, browsers will expose shopper data to third parties,
such as their IP Address. This practice may fall victim to privacy regulation
(as in Europe) or tracking prevention.

In short: server-side integrations provide better protection of user data. Using
backend APIs also helps as your partners receive less sensitive information to
protect or treat with care.


3. APPLAUD ANONYMITY



Make sure your retail media vendor does not expose data sets that can identify
individuals.

Reporting should only expose anonymous and highly aggregated data to
advertisers, with no personally identifying information (PII). For example,
technology may expose information related to a selected cohort of women in their
mid 30’s. However, it should not have specifics on me, you, or other persons.


4. ENSURE ENCRYPTION



With your enviable ability to collect and access many data points, you want to
ensure that it’s safe. To prevent leakage of PII, get confirmation that your
retail media vendor processes personal data with the highest security standards.
Look for encrypted data with hashed values. This approach also minimizes the
negative impact of data breaches such as that experienced by Instacart and other
retail vendors.


5.   DEDICATE TO DATENSPARSAMKEIT



Literally: data thriftiness. This German term refers to how a business should
approach capturing and storing data. Retailers should only handle the data that
they need.

In the past, there was a push to capture as much consumer data as possible, with
the understanding that it may be useful for future marketing efforts.  A more
modern approach would be to economize data capture to only collect elements
necessary for the sake of privacy compliance and consumer benefit. 

In the case of building a retail media network, your adtech partner should
require just a minimum amount of data to work properly.


NEXT STEPS



Future-proofing your retail media technology will help you adhere to
international compliance laws, address consumers’ data privacy concerns, and
build trust.

In evaluating a retail media solution that follows these principles, consider
Crealytics Middleware retail media solution. The simple backend API integrates
directly into your ad server, introducing zero third party cookies. All
personally identifiable data is 100% hashed. The retailer fully controls shopper
data, not the adtech solution.

By introducing Crealytics Middleware to your technology platform now, you don’t
need to worry about changing your technology later as data privacy laws
heighten.


Watch the video to see how Crealytics Middleware works




READY TO BUILD YOUR RETAIL MEDIA BUSINESS?



Contact our team at Crealytics.




JUST GETTING INTO RETAIL MEDIA?



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READ MORE ARTICLES

Blog


GUIDE TO NAVIGATING CONSUMER PRIVACY AND RETAIL MEDIA NETWORKS

Blog


YOUR ULTIMATE RETAIL MEDIA GLOSSARY

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