Commerce Conversations Roundup: April 2023

Healthy Alternatives to Cookies

Life After Third-Party Cookies

DCA members gathered in San Francisco last week to talk about the future of payments and offers – with deep dives into the potential and present impact of generative AI, the persistent challenge of transactional friction, the possibilities of loyalty-as-a-service and similar offerings, and a discussion of how to gather and use powerful data as third-party cookies decline. The last topic is especially important because it represents a profound shift – third-party cookies have long been a staple of marketers’ efforts to tailor ads and promotions to consumers.

What is Driving the Conversation? 

Necessity will be the mother of adoption, as industry leaders are innovating with alternative sources of consumer preference information, ranging from card transaction data (“the card is the cookie”) to social media data, loyalty program records and more. These approaches must protect and give consumers control over personally identifiable information (PII).

One way businesses can use rich data while protecting PII is with anonymized data that protects individual identities while still providing useful insights into consumer behavior.  Clean rooms are an example of this, providing a controlled environment where data from multiple sources can be aggregated and analyzed while ensuring that PII remains secure and confidential. Another approach is to use techniques like differential privacy and federated learning, which enable organizations to analyze data in aggregate while maintaining the confidentiality of individual records.

Questions DCA Members are Asking

1. How dependent are we on data ultimately sourced from third-party cookies – or other sources that may erode?
2. Are our competitors dependent on eroding data sources – and are we relatively better or worse-off than them?
3. Could our data sources be richer and better than they currently are?  Will the innovation to come potentially enrich our business?
4. How fast do we need to move?
5. Do we have a data source that could generate new revenue streams for us, as other sources of data evaporate?

Related DCA Resources

Commerce Code Episode 152: Navigating the Complex Digital World of Social Media Activation

Should We Set Points Free?

If Points Become More Fungible, Do They Still Drive Consumer Engagement? 

This week I was talking with a new DCA member – Points4Purpose – about setting consumer rewards “free.”  Old-school loyalty programs often issued rewards in a currency akin to Chuck E. Cheese tokens – in a totally closed system.  I mean Mr. Cheese no disrespect: those tokens have been collected and, of course, studied in detail.  But they really only worked in one place.  Rewards that can only be used in a narrow space are simply not as valuable, making them less potent in driving consumer behavior.

On The Other Hand…

Many consumer rewards are now redeemable beyond the original issuer, but there’s still a reticence to truly set points free so consumers can use them as they please. What if it drives up the cost of the program?  What if it doesn’t increase loyalty to our program or brand?  All due respect to Sting, even if we love points programs, should we really set them free?

Questions DCA Members Are Asking:

1. How motivated are our customers by redeeming within our program?
2. How much “breakage” do we see – where consumers abandon points or disengage from the program? Would it help if they could make use of their points elsewhere?
3. What would our best customers want to be able to spend their rewards on?
4. What redemption options could be brand-reinforcing for us?
5. Is there a way to pilot an expanded set of points redemption options with a subset of our best customers?

Related DCA Resources

• Commerce Code Episode 101: New Solutions For Loyalty Programs and Consumers
• Commerce Code Episode 98: Rethinking Loyalty for Specialty Merchants and Every Customer

Do You Have Social-Media-Enabled Employees

Work and Life are Blurred in lots of ways. Social Media is part of that.

I used to work in a bike shop.  You know what I had a lot of?  Bike stuff.  You’re surrounded by it, you know more about it than anyone, you’re excited about it, you get a discount.  You’re going to spend your meager income on bike parts and eat Ramen noodles to make up for it.  In my case this was decades before the dawn of social media, but if I were 19 and working at a bike shop now, I’d be taking my interest in the newest, coolest carbon fiber bits and pieces to Instagram, Twitter or Snapchat.

More recently I worked in the land of lawyers.  The idea of employees posting about their employers’ products or services on social media makes lawyers’ heads explode.  One simply cannot control what they might say!  Not a few conferences have been convened just so lawyers can discuss how to prevent such terrible things from happening.

Seizing the Opportunity

We all know that social media in its many manifestations is a deeply powerful tool for commerce of all kinds.  People respond to other people, and particularly to recommendations by others they identify with.  And a company’s employees are the people best positioned to advocate for its brand, experiences, solutions.  They are also by far the best people to advocate for others to come work at the company.  Labor markets are tight and employment brands matter.

So how do we manage the messy, risky space of employee social media engagement?  I had a great conversation on Commerce Code a few weeks ago with Mike Garsin of Brand Networks, a DCA member.  Brand Networks has worked with Walmart to make it easy for their associates to post on social media in a way that manages brand consistency and captures the value of employee advocacy.

So – there are companies that provide solutions here, but leaders still have to keep their eyes on the ball when it comes to something as fundamental as this.  Employees engaging with the brand on social media touches a lot of critical areas for the company.  So – what questions are leaders asking when it comes to activating employees on social media?  Here are a few starters.

Seizing the Opportunity

1. What’s our “baseline” – how much employee activity/advocacy do we have now? If we don’t know what it is, how do we figure it out?
2. How do we identify the constructive messages we want to amplify? What are their characteristics?
3. How do we make it fun? (Is it fun already?  And if not – why not???)
4. What platforms do we start on? And how can we stay agile to shift platforms as the social media landscape shifts?
5. Is it possible to sell too many subscriptions, or is our fulfillment capability unlimited?
6. What’s the positive impact potential if we get employee social media advocacy and enablement right?
7. What’s the worst thing that could happen if we get it wrong?

Commerce Code Episode 152: Navigating the Complex Digital World of Social Activation

New Member Spotlight

Please Welcome Points4Purpose to the Digital Commerce Alliance!

DCA Virtual Events

Open Banking’s Business Opportunities: Creating New Use Cases & Eveluating Value Propositions

Virtual | Wed, May 10th

12pm – 2pm EST

This interactive workshop will explore specific opportunities and best practices that leverage open banking and open data standards to engage with consumers. Safe, secure access to data is at the core of enabling the next generation of consumer experiences and card linking is a key enabler. During this working session, we’ll explore 2 topical areas through a practical lens:

• Communicating consumer value propositions around open data (related to retail, loyalty, marketing, etc.)
• Best practices for ensuring strong user protection around accessing banking or related data

DCA Live Events