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DTC state of play: What’s next for iOS? (2022)

The Apple iOS 14.5 privacy updates of 2021 dealt a huge blow to the Ecommerce industry. Suddenly iPhone users were given full agency over whether to allow the likes of Facebook to share their data, meaning marketers couldn’t identify, track and target them. Great news for customers, bad news for business. 

As Apple iPhones hold a 57% share of the US market and just 4% of US iPhone users decided to ‘opt in’ to app tracking (during the initial roll out), advertising across Facebook and Instagram became much less effective. Some brands reported a 75% drop in Facebook traffic. At the same time, Mail Privacy Protection updates prevented email marketers from knowing when users opened emails, rendering measuring the effectiveness of campaigns hopeless. 

iOS 14.5 - a year on

Source: Gupta Media

A year on from iOS app tracking transparency, the picture is slightly different. At the time of writing, the opt-in rate for US iPhone users hovers at around 37%, up 23% from the initial roll-out. Advertising costs per CPM (cost per thousand impressions) currently stand at a more affordable $2.48 compared to a staggering $6.67 on December 6th 2021.

However, it’s important to note this graph refers to total impressions, not acquired customers. CAC (customer acquisition costs) continue to soar which we detailed at length in a recent piece: The battle against rising CAC.

Ecommerce brands have had no choice these last 12 months than to rise up from the advertising ashes with a new strategy, diversifying everything from the channels they spend money on (Hello, Tik Tok!) to the ad creatives they produce. One-size-fits-all static ads have been replaced by high impact video creatives targeted towards a much wider net. 

Josh Lewis, Growth Marketing Manager at DTC brand, MOJU Drinks says,

“We’ve tested various strategies since the release of iOS 14.5, and we’re continuing to learn every day. We’re always testing new creatives in different formats and have diversified our ad spend across platforms to include TikTok and YouTube. At the moment, we’re playing around with our audiences too and seeing some great results so far.”

Josh Lewis, Growth Marketing Manager

MOJU Drinks

What’s next for iOS?

Since the iOS 14.5 updates, Apple has continued to roll out more and more updates. The good news is that the latest iOS 16 drop has some features that help, not hinder, Ecommerce brands.

When is the new Apple iOS 16 coming out?

The beta version launched on July 11th 2022, but the official iOS 16 release date is expected to be in September. 

We asked Will Tickle, Director of Social Nucleus to share his top line thoughts on iOS 16 and what it means for Ecommerce brands.

"What we know so far from the marketer perspective is that Apple is facilitating split payments with Apple Pay Later. iOS 16 users will be able to spread their Apple Pay purchases across 4 payments, which has the potential to drive elevated sales without impacting your revenue - as businesses will get paid the full sum straightaway. Additionally, Apple has partnered with Shopify to allow iOS 16 users easily accessible tracking information for online orders made via this platform, paving the way for a smoother ordering process for Shopify customers."

What are the key Ecommerce updates for iOS 16?

1. Apple Pay Later

In the last few years, the emergence of ‘pay later’ brands such as Klarna and Clearpay has helped price-conscious customers to spread payments over a longer period, and it’s helped Ecommerce brands convert them. Klarna for instance allows you to spread payments across a month or 3-month period, splitting a big upfront cost into smaller chunks. Now, Apple has jumped on the bandwagon offering to split costs into 4 over a 6 week period. This is good news for Ecommerce brands as they get paid immediately while Apple takes on the financial risk.

2. Web push notifications are supported on Safari

Not to be confused with app notifications, web push notifications are alert-style messages which allow brands to communicate with users on their website in real-time. Even when users leave your site, you can still send them notifications. This enables app-less Ecommerce brands to reach users on multiple devices. On mobiles, these display much the same as app notifications, but on desktops these appear in the bottom right corner of the screen. It’s worth noting that on desktop, users do have to opt-in. However as there’s no third party cookies or data collected, web push notifications fall in line with Apple’s privacy policy.

3. Apple Shipping Tracking

Customers who use Apple Pay will be able to track orders and receipts directly in wallets, reducing the need to keep up with brand shipping communications. This should ease the pressure on CX teams who are most commonly asked ‘where’s my order?’

The death of third party cookies continues

While these latest iOS updates offer some light relief to Ecommerce brands, the death of third party cookies continues. Google Chrome has announced they’ll block third party cookies by the end of 2023, making targeting and advertising even more difficult. 

What should Ecommerce brands do to weather the storm?

1. Accept that first party data is the future 

As the crackdown on third party data continues, concentrating on first party data is believed to be the most effective method to futureproof your Ecommerce business against further updates and changes.

Will Tickle, Director at Social Nucleus says,

"Brands should look to transition away from using third-party cookies to the many alternatives available. First party data, for example, allows you to develop marketing strategies around user activity on your site (but not websites outside your domain). You’ll still be able to track and analyse visitor behaviour on your site and remember customer details. If you’ve got a CMS, you’ll have access to first-party cookie analytics dashboards to track this data."

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First party data is information that a business holds and owns on its current customers. For example, a sign-up quiz hosted on a brand's website would yield data that the brand could store and use to target customers. It removes the need for a ‘middleman’ and makes the brand more self-sufficient. Ecommerce first party data includes, but is not limited to:

  • Browsing history
  • Purchase history
  • Form conversion
  • Shipping and billing (location)
  • Quizzes
  • Feedback and reviews
  • Email segmentation

In many ways first party data is more valuable than third party data as it’s generated from your current customers. Therefore this data is high-quality, cost effective (you don’t need to pay someone else for it) and reliable. You control first party data, so you don’t need to worry about waking up one day and the rug being pulled away. 

Will also recommends making use of zero party data as a way to work with what you've got. He says,

"You can also make use of zero party data (data customers voluntarily share with a brand), such as the use of customer surveys to target products and ads to their needs and preferences. Additionally, you can make use of older strategies like contextual advertising, which allow you to disseminate PPC ads on websites ranking for specific keywords that match your products/services. You’ll also still be able to make full use of targeted ads on social media - these ad tools can still target your core demographic based on location, age, etc."

2. Drive more revenue from existing customers

Unless you’re just starting out as a DTC Ecommerce brand, the likelihood is you’ve already got a large database of potential customers. Instead of always chasing the new and shiny with various advertising spend, it makes sense to work with the customer base you’ve got.

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Conduct a full audit of the end-to-end user experience - it’s likely there’s plenty of gaps and holes to fill. After all, DTC competition is at an all-time high and only those brands offering the best shopping experience will survive this volatile market.

A staggering 7 out of 10 customers buy from a brand once and never come back. Imagine the hike in revenue if those 7 lapsed customers returned for a second and third purchase. Here are 3 simple and effective ways to start increasing that number straight away:

3. Target more effectively

While targeting accuracy might have dropped off a cliff when it comes to Facebook advertising, there are levers brands can pull when it comes to email marketing. Predictive data has become very sophisticated and there are now market solutions which sync with Klaviyo and analyze all customer data to make the best possible predictions around repurchasing times.

4. Optimize email flows

Do you have effective flows in place to funnel customers at every stage of the journey? For instance, 70% of carts are abandoned but you’d be surprised how many brands fail to set up cart abandonment flows.

5. Make repurchasing frictionless

Poor UX is listed in the top three reasons why customers churn. Take a look at the repurchasing experience. Are you driving customers to the same old clunky landing page? Do customers have to faff around with log-in details to buy again? All of these barriers to purchase can be streamlined.

Conclusion

Although the iOS 16 update offers some beneficial features for Ecommerce brands, time’s up for third party cookies. Google Chrome is planning to block third party cookies at the end of 2023 - a cookieless future looms for Ecommerce. Those looking to build a resilient DTC brand need to turn their attention to their own analytics, harnessing the use of first-party data to drive conversion and LTV. 

At Relo, we’re laser focused on getting existing customers to buy again, try a subscription and stay on subscription. Discover how we’re helping the world’s best DTC brands generate 17 x more repeat revenue.

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