Are you prepared for the cookieless era? Only 35% of B2C firms feel so

Only 35% of B2C companies in Singapore feel fully prepared for the shift away from third-party cookies. According to the State Of Customer Engagement Report 2022 by Twilio, 88% of consumers in Singapore prefer for brands to make use of only first-party data when delivering personalised experiences. Yet, as it stands, 73% of B2C companies in Singapore rely on third-party data for their current marketing strategies.

This comes amidst the deprecation of third-party cookies by Google which has been delayed until mid-2023. According to Twilio, 54% of consumers in Singapore said they want brands to do more to protect their privacy and be transparent about data usage, with 51% saying that they stopped purchasing from brands that did not meet their data privacy expectations. Reducing the amount of money spend on the brand's products and services (50%) and telling friends or family members not to trust the brand (38%) were also among the actions taken against such brands.

With the trust gap between consumers and businesses at risk, personalisation has emerged as one of the most important aspects of delivering a competitive brand experience that will attract customers and create brand loyalty. In fact, the report stated that the consequences of not providing personalised experiences to customers can be severe, especially as consumers in Singapore tend to expect personalised experiences compared to other countries.

For instance, 90% of companies in Singapore believe that personalisation is critical to their customer engagement strategy. Meanwhile, 81% of consumers in Singapore said they will stop using a brand if it does not personalise their experience, compared to the global average of 61%. However, the report also revealed that while 75% of companies claim to provide good or excellent personalised experiences to customers, more than half of consumers (53%) disagree, reporting bad, poor or average personalisation.

At the same time, the past two years have caused B2C companies in Singapore to accelerate their digital transformation plans, Twilio said, advancing their digital strategies by an average of 6.8 years. Companies that invested in digital customer engagement also saw an average increase in total revenue of 61%, on top of the positive impact on customer retention and trust. As a result, 28% of B2C companies in Singapore surveyed expect to at least double their digital customer engagement investment by 2025.

Lee Hawksley, SVP and general manager, APAC and Japan (JAPAC), Twilio said that there are five fundamentals for brands to overcome these challenges: embrace digital, personalise every interaction, shift to first-party data, close the trust gap, and avoid engagement fatigue by increasing the quality of their interactions with consumers. “The research clearly shows that companies that prioritise digital customer engagement reap the biggest rewards. Personalisation is actually getting harder to deliver, with high customer expectations, changing technologies, and the diminishing value of third-party cookies," he added. 

On a broader scale, JAPAC companies that invested in digital customer engagement also saw an average increase in total revenue of 84%, on top of the positive impact on customer retention and trust. As a result, 25% of JAPAC companies expect to at least double their digital customer engagement investment by 2025. The report also found that  83% of consumers in JAPAC prefer brands that do not use third-party data, yet 78% of JAPAC companies rely on third-party data for their current marketing strategies. Additionally, 69% of JAPAC consumers want brands to do more to protect their privacy and be transparent about data usage.

Meanwhile, 82% of B2C companies in JAPAC said that personalisation is extremely or very important to their customer engagement strategy. However, while 66% of JAPAC companies believe they provide a good or excellent personalised experience for customers, only 42% of consumers feel the same.

The report is based on responses from 3,450 business leaders and 4,500 consumers across Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, the UK and the US, with 200 to 1,000 responses from each country. The report also includes an analysis of anonymised, aggregate data from over 1.6 trillion interactions that have occurred on Twilio’s platform over the past several years.

Photo courtesy: 123RF

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