E-commerce past | Farewell to public domain traffic

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It is not difficult to see that 2020 is the first year of the development of data elements, and 2021 is the first year of data security development.

On September 1, the Data Security Law will be officially implemented. As the first special law on data security in my country, the importance and attention of data security have been greatly enhanced. At the same time, the Personal Information Protection Law will also be officially implemented on November 1. It can be said that with the continuous improvement of the law, the strengthening of data security supervision is promoting the self-revolution of related industries.

The e-commerce industry is the first to be hit.

Recently, JD.com, Douyin, and Taobao have announced that they will complete the desensitization of consumer order information in August: update the order information encryption notification and system upgrade and transformation plan, take desensitization and encryption measures for consumers' sensitive personal information in the ecological chain, and no longer provide consumers' sensitive personal information in plain text to merchants and third-party software service providers. As a result, the digital transformation and upgrading of the e-commerce industry to achieve cost reduction and efficiency improvement is becoming more and more urgent.

There is not much time left for relevant stakeholders to adjust.

Whose cake was touched?

According to the adjustment announcements released by the three e-commerce platforms, the consumer information that needs to be desensitized mainly includes: contact number, name, and detailed delivery address in user orders. This means that merchants and related service providers will no longer be able to directly and in batches obtain consumer information in these dimensions, which in turn affects independent telemarketing business activities such as user in-depth portrait analysis, precision marketing, and secondary reach.

"In the past, consumers usually placed orders with us, and we could directly obtain their information, which was then analyzed by a third party and then pushed. In this case, the re-order rate was still good for merchants like us who lacked brand effects."

Relevant people said that for different merchants, the impact of desensitizing user information orders can be said to be different.

On the one hand, if order information desensitization can be thoroughly implemented, compliance operations will not be greatly affected. At the same time, the marketing black industry chain may either evolve or disappear in this round of reshuffle.

Zhugeio believes that, overall, once the policy is implemented, it will regulate the entire industry and protect the interests of everyone, including users and merchants. In essence, the purpose of desensitizing order information is to add a firewall for user information, not to isolate users and merchants. Therefore, legal and compliant operators will not be affected too much.

On the other hand, as information is desensitized and encrypted, public domain traffic will become increasingly concentrated, and merchants may become increasingly dependent on platforms for marketing.

GrowingIO said, "The desensitization of e-commerce order information may cut off the path for enterprises to transform from public domain to private domain. Each e-commerce platform completes user conversion within its own closed ecological loop. For large enterprises, their bargaining power on e-commerce platforms may become lower and lower, and they will not be able to obtain first-hand user data, thus losing a certain voice."

In general, for the "decentralized" second-tier e-commerce, there is no doubt that an important customer acquisition channel is missing, and the conversion rate has dropped significantly. In other words, the cost of acquiring customers for merchants is increasing, and business growth may be affected.

The links from acquiring customers to reaching customers, and from public traffic to private traffic, will become increasingly complex. As information recommendations to consumers are affected, e-commerce merchants urgently need more effective means of traffic marketing, that is, to explore more effective ways to reach users.

Of course, this also means that as the cost of acquiring customers increases, user-centric refined operations and user thinking that improves conversion rates and repurchase rates are becoming the key to e-commerce transformation.

Three pillars of e-commerce growth

Indeed, in the e-commerce market, refined user operation services will see growth.

First, let’s take a look at the full-chain solution for the growth of e-commerce refined operations. At present, the refined operation solution of the e-commerce industry mainly covers three parts: user data collection, data collection and analysis, and user refined operations.

There are two types of data collection: one is offline, such as using package cards/meal cards and offline stores to accumulate user data; the other is online, which collects user behavior data, user information, user consumption information, etc. from various platforms. Currently, the mainstream online data collection methods usually include SDK point-of-sale collection and non-point-of-sale collection. Technically speaking, most related manufacturers have data collection service capabilities.

In the data analysis part, one-stop data docking, analysis, insight, user contact and interaction are usually carried out based on the user data platform CDP. Therefore, the CDP platform supports API interface docking to connect user data from various channels, and then completes data cleaning, user portrait sorting, user tag construction, user ID account, and helps customers with insight and decision-making. At present, the mainstream user data analysis manufacturers in China include Zhuge io, GrowingIO, Sensors Data, Umeng, etc.

With the establishment of user portraits, providing users with personalized and accurate services to improve conversion rate, repurchase rate and business growth, the operation of private traffic pools has become a key method. At present, private traffic pools around the social platform ecosystem are becoming a trend, and more and more solutions are beginning to help businesses achieve precision marketing and customer growth based on the enterprise WeChat ecosystem, mini programs, official accounts, live broadcast platforms, etc. For example, Youzan, Weimeng, SalesEasy and other manufacturers have helped companies to grow their refined operations around malls and mini programs.

With the implementation of e-commerce order information desensitization measures, it is not difficult to see that for e-commerce merchants, operating existing data assets and promoting fission effects have become the key to business growth. Therefore, clear and effective customer portraits and multi-dimensional data analysis, operation and marketing models have become the key to the competitiveness of data-driven service providers.

Zhuge.io's new retail e-commerce solution proposes to use powerful data collection and integration capabilities, unified data desensitization, user management and other information management mechanisms to store user information, capture interactive behaviors, and achieve accurate target customer segmentation, such as identification and judgment of fans and customer identities, thereby providing companies with dynamically updated clear customer portraits, multi-dimensional data analysis, operations and marketing models, and providing data support for merchants' long-term, high-frequency marketing operations.

In addition, training customers' growth awareness and capabilities has also become an important aspect. GrowingIO's data-driven e-commerce growth solution covers four major aspects: market, product, operation, and data. Based on the CDP customer data platform, it provides enterprises with products such as customer acquisition analysis, product analysis, and intelligent operation, as well as customer success, indicator system construction, analytical insights, data-driven practice, label portrait modeling, operational scenario design, data planning governance, data intelligence and other services, as well as training such as Growth Academy and Enterprise Growth, to ensure that the data capabilities of enterprises are improved simultaneously in terms of both people and tools.

Private domain operations around social ecology

From the above e-commerce digital solutions, it is not difficult to see that as data becomes the basis for e-commerce retail enterprises to make operational decisions, private traffic management is becoming the key to digital transformation and upgrading. Therefore, private traffic operation around the social ecosystem is being recognized by the market as the most effective means at present.

On the one hand, the characteristics of social platforms such as shopping malls, mini programs, corporate WeChat, communities, official accounts, live broadcast rooms, etc. provide more room for development for merchant users.

Zhugeio said that in traditional e-commerce operations, user traffic is concentrated on centralized platforms where merchants and customers cannot directly trade and communicate, which gives e-commerce platforms (not merchants) significant control over traffic, transaction data and customer relationships. Today, as traffic becomes increasingly concentrated at the top, the cost of acquiring customers will become higher under traffic blockade. "Relying on the mesh structure formed by the user relationship chain and the advantage of less intervention, private traffic operations under the social platform ecosystem are becoming an inevitable trend."

At the same time, the key element of private domain traffic operation is to provide users with more suitable services, thereby ensuring user stickiness, brand loyalty and laying the foundation for fission marketing.

“It has powerful intelligent marketing capabilities for user management of WeChat official accounts, mini-programs, etc., and provides data support for merchants’ long-term and high-frequency marketing operations.”

GrowingIO pointed out that in the demographic dividend period when the cost of acquiring customers was very low, most companies valued traffic. However, in the new economic situation, especially in the era of stock economy, more repeat purchases and better customer experience will increase user loyalty to the brand and product value. The core is to do a good job in CLV (user life cycle value).

Indeed, the rise of refined user operations represented by private domain traffic operations is becoming an inevitable trend. This will surely usher in a greater development environment for refined user operations service providers.

In this regard, Song Tao, research director of Hibi Research Institute, said that the market for private domain traffic operation and refined user operation services will usher in good news, but there is still a prerequisite, that is, only after the policies and systems supporting the market-oriented mechanism of data elements are improved can it truly usher in great development. Before that, although there will be development, it will be easily restricted by data security-related laws and regulations.