The iOS 14.5 update, which gives iPhone and iPad users a clear, seamless way to opt out of data tracking, will have significant implications for brands and retailers. Those who use customer insights in their online marketing campaigns (on Facebook, Instagram, or TikTok, for example) are most heavily affected.
Apple is going all-in on user data privacy. This trend has been years in the making and will change the way marketers can target (potential) customers significantly. Any retailer with a high percentage of mobile traffic will naturally be concerned about this change.
In light of this update, it will become increasingly important for companies to collect user data without relying on third-party data from Google, Facebook, or Criteo.
So, what factors contributed to this change, how can we adapt moving forward, and what can be learned from companies rising to the top in this unstable environment?
Companies like Facebook collect data based on the behavior of their users. This information could include the pages someone has liked and the sites that they have visited. The core issue with the iOS 14.5 update is that we will be unable to target users based on their behavior, to the extent that we’ve been able to over the last few years.
Until now, online marketers have been able to create targeted ads for user groups who have similar characteristics and habits. However, if a user chooses to opt out of sharing their data with Facebook on their iPhones, Apple will no longer send Facebook the (encrypted) user ID, enabling Facebook to match the respective user to its actions. In this case, brands and retailers are unable to address these users based on their surfing behavior.
This does not mean that Facebook will not still know a lot about its users. On the contrary, they have accumulated heaps of information on us over the years. However, as time goes by and more people opt-out of sharing their user data, it will become increasingly difficult for Facebook, Instagram, and even Google to offer the same marketing segmentation options to advertisers as they can today.
Back to “old-fashioned campaigning”
One result could be that marketers are forced to recalibrate and go back to good old-fashioned campaigning. These efforts will be fairly ad-hoc, and we will have to look to success stories for clues on what worked well and what did not.
Regardless, retailers and brands must start to collect customer data. Most importantly, it is critical to establish a means of communicating with clients outside of (re-)marketing campaigns. E-mail will probably become more relevant again, as will iMessage and WhatsApp.
Memberships are more valuable than ever
It seems unlikely that Apple will ask users whether they would like to “not share their iMessage data,” Therefore, this line remains open. Zalando Plus and Amazon Prime are good examples of companies that have leveraged this to find a way in. A Prime or Plus subscription is an excellent way to ask for an email address and communicate specials outside of iOS native apps.
Offering subscription incentives
Other service providers like La Fourche in France offer a subscription model that gives users access to discounts and benefits. In the case of La Fourche, they do not even currently have a native app, and therefore customer communication is mostly e-mail based.
The return to e-mail?
This regained emphasis on e-mail communication is indeed a bit baffling based on everything we’ve experienced over the last several years. We have all become accustomed to push notifications and app installs as the main drivers for customer interactions and growth. But Apple’s iOS 14.5 update might impact how we as marketers can interact with (potential) customers in more ways than we could possibly imagine.
The case of Zalando
The coronavirus pandemic wreaked havoc on last year’s fashion e-commerce predictions. Despite this, online fashion retailers have soared. Brands like Zalando reported a 32%–34% growth in GMV during the second quarter of 2020.
Building on this momentum, we’ve also recently seen them doubled-down on the Plus Membership offering, adding highly relevant, product-related benefits for those who join. For example, Plus members in Germany now have access to selected collections and products before anyone else. The expanded Plus program enables brand partners to develop even closer customer relationships and grow the following for their brand on the Zalando platform.
Membership, spending, and what happens next
To see how membership impact spending, we can look to the case of Amazon Prime. During the most recently measured survey period ending March 2019, it was found that Prime members spend an average of 1,400 U.S. dollars on the online shopping platform every year, compared to 600 U.S. dollars spending of non-Prime members. Considering pandemic spending trends, it is reasonable to assume that the next set of numbers will reveal an even larger split. And although we don’t have the exact stats for Zalando, it is safe to assume that the trend holds.
In the case of Zalando Plus and iOS 14.5, there might not be a direct connection. However, these types of initiatives could very well be the hidden ingredient in the secret sauce that keeps Zalando at the top of the food chain for years to come.
At GANDT, we’re always looking to anticipate how new policies, updates, and trends will impact your marketing efforts. Get in touch to discuss how your business strategy could be best aligned to collect user data and effectively communicate with your current and potential customers. Likewise, if you’d like to stay up to date on current social media trends and growth marketing hacks, follow us on LinkedIn, Facebook, and Twitter for the latest digital marketing news.