“We’ll deliver that in six months to a year.”
When your business has an urgent need for a new technical capability, those aren’t the words you want to hear. Retail moves fast, often operating within thin margins. When a new business opportunity crops up, the last thing you want is to be blocked by the absence of a technical capability.
But it can be difficult for CTOs and technical teams to anticipate what comes next when the bulk of their day-to-day work is caught up in serving their businesses’ current needs. And the last thing a technical leader wants is to make a technology decision that backs the business into a corner down the road.
At Shopify, we believe that good business strategy is empowered by technology choices made years ago. Our job is to see around technology corners—to get out ahead of the needs of Shopify businesses so that when the world of commerce shifts and a new business strategy arises, they’ve already got all of the technological tools they need to hop right on it.
Seeing around corners: Personalization
Nowhere is the need to stay ahead of the curve more evident than in the shifting world of customer personalization. The effectiveness of third-party cookies is dwindling—and the retailers who thrive in the next era will have to rebuild their ecommerce presences on the strength of their first-party data to make shopping more personal than ever before.
In our new report, Seeing around corners: Personalization, Shopify’s director of product Alex Danco says:
"For businesses built on Shopify, the future is bright. Over the past four years, we’ve redesigned our foundation for customer data, in a way that’s battle-tested by our very best merchants, and adaptable to new privacy and regulatory changes."
Let’s take a deeper dive into these new and exciting changes to Shopify’s core customer data model, and all that they can do for personalization for your brand.
What does personalization really mean?
Customers simultaneously love personalization, and hate how it’s often carried out.
Here’s what we mean by that.
Retailers strive to build personalized experiences because they know that personalization increases their acquisition rates and drives conversion.
But consciously, at least, consumers don’t express great love for their experiences. In a 2023 Forrester survey, the majority of Americans (67%) rated their experiences with brands as being only “okay.” Just 19% rated them as good, and excellent came in at 0%.
Oof.
Here’s the thing, though: The move from personalization IRL to personalization online has been… rough. And it’s all because of a little thing called third-party data—that aggregated data that retailers could purchase and use to drive their acquisition and conversion efforts.
Don’t get us wrong: Personalization using third-party data worked—to a degree. That’s why it was relied on so heavily for so long—it was easy to get and easy to turn around.
But the personalization it produced felt as personal as a generic “Happy Birthday” email. And it often felt creepy—like when a pair of shoes a consumer looked at once stalked them around the internet for the next year. As consumers have come to care more about their privacy and governments have passed more and more regulations to protect it, brands have an opportunity to rely on first-party data instead. And that’s a great thing for consumer personalization.
What’s so great about first-party data?
First-party data is data that a company owns and that users have opted into. It’s click data from a retailer’s store. It’s first-hand knowledge of what a customer has browsed, favorited, and added to their cart. It’s all the data that says which channels a consumer came in from and which campaigns resonated.
That’s a lot more specificity than the anonymized, aggregated information that third-party data provided. For instance, with the knowledge that a customer favorited several items in a certain line of products, a retailer can send them emails customized around those products, or even content marketing with knowledge related to them. When a customer service agent is fed information about the customer’s purchase history from the moment they begin a help desk call, they can immediately act to help them without making them retell the whole story or retry solutions they’ve already been told to try.
Or, if the customer is contacting the brand to find out when a new item might be in stock, the agent can suggest complementary or like products, as well as a specific product availability update.
That’s a level of personalization that truly makes a customer feel seen and known, in a way that’s just helpful—not pushy or creepy. Not only is it where personalization is headed, but soon, it’s also going to be table stakes.
It’s got to be unified to maximize its value
There is one caveat: First-party customer data has got to be unified for you to get the most out of it.
With the explosion of omnichannel retail, the number of channels that customers browse and shop on has proliferated. So too have the number of channels on which retailers run acquisition campaigns. And customers often create multiple channels through multiple email addresses on multiple platforms, whether knowingly to get more sign-up discounts or just because, well, they forgot they already had an account.
This makes things difficult for brands that are trying to really understand and personalize for their customers, because it creates a fragmented view. Is this really a new customer, or is this just the same customer signing up through a different medium? It’s hard to create a seamless, known experience for a customer to browse online, pick up in person, and return through mail when they’re working through several different identities. And let’s not even mention the kinds of difficulties this creates when developing highly targeted acquisition campaigns.
Shopify’s redesigned core customer data model
We’ve spent the last four years at Shopify redesigning our core customer data model to unify retailers’ first-party data across channels and profiles into a single profile. This forms the foundation upon which brands can build more powerful, relevant, and engaging personalization throughout their marketing and sales funnels.
Think personalized outreach campaigns, customized storefronts, richer interactions with customer service, all culminating in the best-converting ecommerce checkout that checks shoppers out on one page prepopulated with their payment and shipping information. This is something that only happens on the back of first-party data.
Marketing, segmentation, and personalized campaigns can occur thanks to built-in features and products, and apps that draw from the martech functions built into that core model.
Retailers can:
- Acquire customers using Shopify Audiences, Collabs, Collective, and Shop Campaigns
- Get buyers to the store with Shopify email, Klaviyo, and other partners
- Create personalized storefronts that increase conversion
- Provide the best checkout in the world with streamlined flows, prepopulated shipping and payment information, and one-click checkout
Other platforms claim to unify data—but they do so by passing data back and forth between systems using middleware and integrations to talk between multiple customer profiles. On Shopify, data begins unified, and stays that way. There is only ever one customer—and that’s the foundational data upon which we build everything else.
It all happens thanks to Shopify’s dedication to seeing around corners
The decisions we made yesterday put retailers on Shopify ahead today. The decisions we make today will put you ahead tomorrow.
It’s a baked-in process that we do for you. It’s in our DNA.
For more, read our new report, Seeing Around Corners: Personalization.
Seeing Around Corners FAQ
What does "seeing around corners" mean in business strategy?
Seeing around corners means spotting a major shift in a market before it fully takes hold, then adjusting technology or strategy in advance instead of reacting after competitors have already moved. In broader business strategy circles, recognizing and acting on these shifts is often described as a core reason leaders need to look beyond their own company, industry, and customer base. For retailers, that translates into building the technical foundation for a trend, like the shift toward first-party data, years before it becomes a competitive necessity.
How does the decline of third-party cookies affect ecommerce personalization?
As third-party cookies lose effectiveness, retailers lose the aggregated, anonymized data they once relied on to power acquisition and conversion campaigns. That forces a rebuild of the entire personalization approach around first-party data collected directly from a store's own customers. The upside is that first-party data tends to be more specific than third-party data ever was, since it comes straight from a shopper's actual browsing, favoriting, and purchase behavior rather than a purchased, aggregated dataset.
Can retailers collect first-party data without violating privacy regulations?
Retailers can collect first-party data in a privacy-compliant way because, by definition, it's information customers have already opted into sharing directly with a store. This sets it apart from third-party data, which relies on aggregation from outside sources with less direct consent. A customer data foundation built to adapt to new privacy and regulatory changes lets a business keep personalizing experiences as rules shift, instead of scrambling to rebuild data practices each time a new law passes.
How does first-party data improve customer service interactions?
First-party data lets a customer service agent see a shopper's purchase history the moment a call begins, so they can help immediately instead of asking the customer to repeat their story. If a customer reaches out about a restock, the agent can also suggest complementary products alongside a specific availability update. This turns a routine support call into a more personalized touchpoint, since the agent already has real, first-hand context instead of starting from scratch.
How long does it take to build a first-party data strategy?
Building a reliable first-party data strategy is a multi-year effort rather than a quick setup. Shopify spent four years redesigning its core customer data model to unify first-party data across channels and profiles into a single customer view. That timeline reflects the difficulty of the underlying problem: consolidating fragmented customer identities across multiple channels, emails, and accounts so a business gets one accurate picture of each shopper instead of several conflicting ones.
