When Third-Party Cookies Disappear, First-Party Data Becomes the New Currency

How retailers are turning customer data into billion-dollar advertising businesses

Third-party cookies are officially dead. Google pushed the final deadline to 2025, but smart companies stopped waiting for the inevitable. While most brands scramble to figure out how they'll target ads without tracking pixels, a different group is quietly building data empires.

Retailers with customer loyalty programs aren't just surviving the cookie apocalypse—they're thriving in it.

The Data Gold Rush

When cookies disappear, first-party data becomes the only reliable way to reach specific customers. And guess who has the most valuable first-party data? Companies that know what you actually buy, not just what you browse.

Retail media networks are projected to generate $100 billion in annual revenue over the next five years, with margins that make traditional advertising look quaint. On-site advertising margins run 80% to 90%, while off-site margins still hit 20% to 30%.

This isn't just about selling more products on their own websites. Retailers are licensing their customer data to help other brands advertise everywhere else.

Kroger's Precision Marketing Machine

Kroger operates one of the most sophisticated retail media networks in the country. Their Kroger Precision Marketing (KPM) leverages first-party data from over 60 million households in their loyalty program to deliver advertising that goes far beyond grocery aisles.

Here's how it works: Kroger knows you buy organic baby food, premium dog treats, and gluten-free pasta. That data helps a baby formula company target new parents, a pet insurance company reach pet owners, and a health food brand find customers with dietary restrictions.

Kroger sells this targeting capability to advertisers through multiple channels—search ads on their website, display ads in their mobile app, and programmatic advertising across the entire internet. They've turned customer purchase history into a revenue stream that complements grocery sales.

The key insight? Grocery purchase data is incredibly predictive. What people buy reveals life stage, household income, health concerns, and lifestyle choices better than any survey.

Walmart's Connected TV Play

Walmart took a different approach with Walmart Connect. They've partnered with Roku to offer advertisers access to premium inventory, allowing brands to reach Walmart shoppers on Roku devices with targeted ads.

Think about the power of this combination. Walmart knows you bought a new TV last month. Roku knows you're streaming content on that TV tonight. Together, they can show you ads for TV mounting brackets, sound bars, or streaming services—all based on actual purchase behavior, not just browsing history.

This connected TV integration represents the future of retail media. Instead of just reaching customers when they're shopping, retailers can reach them wherever they're consuming media.

The Data Moat Strategy

What makes retail media networks particularly valuable is the quality and depth of their first-party data. Retailers collect incredibly detailed information including purchase behavior, expanded demographics, and other attributes that influence purchases.

Traditional digital advertising relies on assumptions and inferences. Retail media networks know exactly what customers buy, how much they spend, and how often they return. This creates several competitive advantages:

Purchase Intent Accuracy: Someone browsing lawn mowers online might just be researching. Someone who bought grass seed and fertilizer last weekend is actually maintaining a yard.

Seasonal Predictability: Retailers can identify customers who buy specific products annually—garden supplies in spring, holiday decorations in November, tax software in January.

Household Composition: Purchase patterns reveal family size, ages of children, pet ownership, and lifestyle preferences with remarkable accuracy.

Brand Loyalty Patterns: Retailers know which customers stick with premium brands versus those who buy based on price, informing how advertisers should message different segments.

Beyond Amazon's Dominance

Amazon controls 75% of the U.S. retail media market, but that dominance is creating opportunities for other players. Brands want alternatives to avoid over-dependence on a single platform.

Target's Roundel network lets advertisers leverage Target's first-party data to reach customers off-site on more than 150 premium publishers. This reach extension means Target can help a back-to-school advertiser find their customers not just on Target.com, but across news sites, social media, and other digital properties.

Smaller retailers are finding their niche too. Etsy's retail media business grew 20% by requiring sellers above certain thresholds to spend part of their revenue on advertising within the platform. Their first-party data about handmade goods and vintage items creates unique targeting opportunities that Amazon can't replicate.

The Email Revenue Revolution

Not every retailer needs to build a full media network. Retailers can open their email newsletters to third-party demand, transforming email from a distribution channel to a revenue source.

A home improvement retailer with 500,000 email subscribers can sell newsletter sponsorships to mortgage companies, insurance providers, or moving services. The retailer's purchase data helps these advertisers target homeowners who are actually making home improvements, not just browsing Pinterest boards.

This approach works for any retailer with a substantial email list and clear customer segments. The key is understanding which adjacent products or services their customers might need.

The Privacy Advantage

Retail media represents a 100% first-party data solution for the post-cookie world. Unlike third-party tracking, customers willingly share their information in exchange for loyalty benefits, personalized recommendations, and exclusive offers.

This consent-based data collection creates stronger legal protection under privacy regulations like GDPR and CCPA. Customers understand the value exchange—they get better prices and relevant offers in return for sharing purchase data.

Technical Infrastructure Requirements

Building effective retail media capabilities requires significant technical investment. Modern systems need to handle:

Real-Time Data Processing: Customer purchase data must be available for ad targeting within hours, not days.

Cross-Platform Identity: Connecting in-store purchases to online behavior and ad exposure across multiple devices.

Attribution Measurement: Proving that advertising actually drove incremental sales, not just reaching customers who would have bought anyway.

Privacy Compliance: Ensuring data usage meets regulatory requirements while still enabling effective targeting.

Most linear systems weren't designed to handle massive first-party data sets, requiring publishers to invest in new media planning and order management systems.

What This Means for Brands

The shift to first-party data changes how brands should think about advertising partnerships. Instead of just buying reach and frequency, they're buying access to specific customer segments based on actual behavior.

Smart brands are diversifying their retail media investments. Successful teams are building identity graphs that take advantage of multiple networks, plugging into as many retail media networks as possible to buy audiences locally and effectively.

This requires new measurement frameworks. Traditional metrics like impressions and click-through rates matter less than incremental sales and customer acquisition costs.

The Coming Consolidation

As retail media networks mature, expect significant consolidation. Smaller retailers will partner with technology providers rather than building their own platforms. Criteo Retail Media partners with 225 retailers globally to build, manage, and scale customizable retail media networks.

This consolidation will create winners and losers. Retailers with unique customer bases and strong first-party data will command premium pricing. Those with commoditized audiences will compete primarily on cost.

The Measurement Challenge

The biggest obstacle to retail media growth isn't technology or data—it's measurement. Unified Marketing Measurement combines marketing mix modeling, multi-touch attribution, and incrementality testing to reveal what truly drives marketing success.

Brands need to understand how retail media campaigns interact with their other marketing efforts. A customer might see a targeted ad on a retail site, but purchase through Google search or in a physical store. Attributing that sale correctly requires sophisticated tracking across all touchpoints.

Looking Forward

The cookie apocalypse is accelerating changes that were already underway. Retailers with strong customer relationships and valuable first-party data are building new revenue streams. Brands are learning to work with multiple data partners instead of relying on universal tracking.

This isn't just about replacing lost advertising capabilities. It's about creating more relevant, less intrusive advertising experiences based on actual customer needs rather than inferred interests.

The retailers winning this transition share common characteristics: substantial customer bases, detailed transaction data, and the technical infrastructure to activate that data for advertising. Those without these assets will need to partner, acquire, or get left behind.

The first-party data economy is here. The question isn't whether it will replace cookie-based advertising—it already is. The question is which companies will control the most valuable data and how they'll use that control to reshape digital marketing.

Sources: BCG, Criteo, Amazon Ads, Marketing Evolution, Operative, and other industry research.