Detangling data: The future of data transparency in digital advertising

To enable partners to establish better ways of navigating data usage, we have centered Zalando Marketing Service’s (ZMS) customer insights ecosystem on trust and privacy. In this article, we unpack how you can use holistic customer insights to establish relevant and engaging messaging that will deepen customer relationships and brand affinity.

Waving goodbye to third-party cookies

In case you missed it, let us quickly fill you in. In 2021, Google and Apple changed their policy for targeted online advertising. Until very recently, user preferences were collected and used to personalize ads across the web. Brands could target users across various social media platforms and websites to show them items they would be likely to buy, based on their search history.

Nowadays, users must actively allow tracking for a more personalized advertising experience. The latest Apple iOS version includes a new privacy feature which means that mobile apps are forced to ask users for permission to allow them to collect tracking data.
According to Statista, the opt-in rate (how many people are choosing to allow app tracking) is around 21 percent, as of Q4 2021. But, with so many users concerned about their online activities being tracked, an increasingly low opt-in rate had been predicted.

Advertisers need to adapt their strategies to be successful

All this to say, despite the challenges surrounding customer insights, success strategies exist and we’re here to share them with you!

First and foremost if one thing is clear, it’s that leveraging customer insights is a must. Investing in consistent and clear branding is also a key success strategy, so it’s critical that brands know their audience and what makes them tick.

What’s also gaining increasing importance is the direct-to-consumer platform as a provider of proprietary first-party customer insights.

Why is that?

At Zalando, trust and privacy are at the heart of our customer promises. Over the past few years, we’ve built up our own ecosystem of insights, centered on trusted and explicit relationships with the customer. With insights collection, and segmentation based on aggregated data and customer surveys, brands can reach the right audience on Zalando and beyond. Reporting and analytics allow brands to fine-tune their activities and results with a holistic customer insights strategy, from purchase insights to campaign execution.

Personalization and followership

On Zalando, personalization is also made possible by offering customers the chance to follow brands they like, similar to followership on social media. App customers who follow brands and have push notifications installed get a notification whenever a brand they follow has a new collection or product drop – pretty cool! They also see the brand they follow on the Zalando homepage if logged in.

At Zalando we’ve also already been providing personalization via behavioral-based audience segmentation. Added to that are customer audiences, those are audiences who are more likely to shop specific brands, or adjacent brand audiences, who are likely to shop the competition, or category audiences who are likely to shop certain categories such as “men’s sneakers” for example.

zTypes are created by combining the aggregated, non-identifiable purchase data of all Zalando customers with customer surveys about media they consume, brands they like, and influencers they follow. Right now, we’ve segmented the fashion market into “hip poppers”, “street stylers”, “culturists”, and more. Each segment is broken down by average order volume, average item value, shopping frequency, share of wallet, as well as details on most shopped categories, social media platform preferences and persona characteristics. zTypes now also leverages Zalando’s Fashion DNA approach, a visual machine learning approach that allows automated and ongoing optimization. It works by allowing products to be sorted into a zType based on the style attributes of an SKU. This is re-scored monthly to ensure all of our assortment goes into our zType model.

Understand and use your customer insights

The key message here is really this: Holistic and effective customer insights usage from purchase insights to campaign execution will be a crucial component in the future success for our partners.