How the cookie crumbles

Matt Gould, chief commerce officer at Apply Digital, considers whether retail businesses are truly prepared for a cookieless future

Reports of its death may have been exaggerated several times over by now, but the end of the third-party tracking cookie is, I promise you, on the cards. For a sector like retail, which remains highly dependent on consumer data for ad targeting and personalisation, that is a big deal.

While Google gave third-party cookies a  final reprieve from deprecation on Chrome, a single opt-in policy that is set to take effect in 2025 will greatly reduce their usefulness.

Businesses will soon be operating in a world with significantly limited access to third-party data — and all indicators point towards at least two in five UK online users clicking reject. And besides — if you were looking for another nail for the coffin lid — the technology’s inherent limitations mean third-party cookies will invariably be overshadowed by better options.

Despite this shift, a worrying paradox remains within the retail industry: businesses appear optimistic about their preparations for a cookieless future, but closer scrutiny suggests that confidence may be masking worrying gaps in true readiness.

This has been thrown into stark relief by recent research my team carried out amongst senior retail marketers regarding their data strategies. The results reveal an enthusiasm for the transition, with 69% claiming to have plans in place for a cookieless future. However, this assurance is contrasted by the fact only eight per cent feel they’re prepared to deliver on those plans without encountering significant hurdles.

So what’s going on here?

My view is that although retailers may have recognised the need for change, and are making efforts to address it, optimism is likely based more on intention than on operational capacity.

For example, our survey reveals that data infrastructure remains a weak link; many businesses lack the necessary data systems or analytic capabilities to transform raw data into actionable insights. Indeed, nearly a third of retailers are yet to implement effective first-party data collection methods, leaving a majority still reliant on outdated or incomplete data systems that may be insufficient for high performing targeting strategies.

The fundamental challenge, therefore, lies in bridging the gaps between data acquisition, data analysis and making data actionable, areas in which many organisations remain underprepared.

Adding to these technical challenges are consumers themselves, whose attitudes towards data collection continue to evolve in ways that complicate marketers’ work. While many appreciate personalised recommendations and offers, our research highlights that a significant portion are becoming less willing to share their data - yet another paradox to contend with.

More than a third of UK web users say they will opt out of third-party cookies on Chrome when the time comes, with an additional 22% still undecided according to a complementary consumer survey conducted by my team. This divide reflects a rising awareness around privacy and data usage, with a growing number of users indicating they want more control over how their personal data is collected and used.

Success will therefore increasingly hinge on how well companies can communicate the value exchange when requesting data. Incentives and loyalty programmes can be valuable tools in making a case, but transparency and a seamless, privacy-respecting user experience are also essential to maintaining trust.

Indeed, a third of consumers in our research state they want the option to decide precisely what data they are willing to share and for what purposes, while 30% expect full transparency on how their data is used. Furthermore, users expect something tangible in exchange for sharing their data — which, in order of preference, leads with rewards or points, and is followed by personalised recommendations, or special offers.

The shift from reactive to proactive

Understanding these nuances of customer expectations is, of course, essential, but effectively aligning technological capabilities to these demands one further consideration: the cultural readiness of a business to adapt.

Here, bear in mind that 99% of businesses in our survey continue to use third-party tracking cookies for online advertising, and seven in 10 retailers welcomed Google’s extension. Although this is entirely understandable, this (over)dependence shows how deeply rooted this fading technology remains in the sector.

It’s therefore time for retailers to look inward and consider how prepared for the future they really are. Certainly they cannot afford to treat cookies as part of their long-term strategy, given this is ultimately a dead end. Instead, they must actively explore strategies and technologies that promise more sustainable and reliable data solutions.

For instance, tools such as behavioural AI mapping are gaining momentum, which provide more precise audience insights without relying on cookies. However, leveraging these tools demands new skills, resources, expertise, and a willingness to experiment — qualities not always nurtured by all business cultures.

We are in a transitional phase and while Google may have ended any uncertainty over third-party cookies’ future on Chrome, this doesn’t mean they should inevitably play a part in retailers’ digital strategy. Now  is the time to check for barriers to change and potential blindspots. It’s also the time to close the gap between optimistic plans and actual readiness by shifting strategies from reactive to proactive.

Third-party cookies will phase out with or without a Google mandate, and the disparity between businesses’ confidence and their actual capabilities will become more visible. However, those who commit to investing in robust data platforms, strengthening customer relationships, and prioritising transparency will be best-positioned to bridge this gap and will certainly boost their fortunes in the era of Web 3.0.

But that only works with the internal will to change and correctly prepare.