By now, you have heard the news: iOS 14 has been released. Clearly, it will have a significant impact on retailers’ and restaurant operators’ marketing strategies as these are highly reliant on mobile app and browser based data. We are sad to say that, overall, it is mostly bad news.
The onslaught of COVID has been particularly tough for retail marketers (see the blog on retailer shopper analyses). Many have been able to make up some lost ground through drive-through, pickup, and delivery strategies. Core to enabling these revenue-propping strategies are apps. Those same businesses are now facing a new level of uncertainty with the iOS changes released and planned by Apple.
iOS 14 introduced two major changes that are most relevant to the restaurant sector:
1) Lower fidelity location data; and
2) A decreased ability to leverage data for uses such as re-retargeting across all browsers on iOS 14 (Chrome, Firefox, Safari, etc.).
Apple has presented these changes as necessary to protect consumer privacy. However, the technology and data policy changes may have some unintended consequences that erode the ability of restaurants and retailers to strengthen customer relationships and increase LTV.
With iOS 14, Apple is introducing users to a Precise Location toggle for Location Services. This new toggle gives the user much more control over which apps can access their current location –and with what fidelity. Before iOS 14, you could grant an app access to your location either while using the app, or always-on via a background service. If location access was consented to by the consumer, the app would regularly receive the exact GPS coordinates of the device.
In reality, many apps don’t actually need such precise location information (weather, local news, etc.) and with iOS 14, consumers can elect to pass their “approximate location.” If they do this, iOS will expose imprecise locations that are a few miles in diameter. The imprecise data will only be computed a few times per hour, so precise tracking will be disabled. The user’s true location will be somewhere inside the circular region, but not necessarily in the center.
What does this mean for restaurant and retailer apps? Most likely, an eroded customer experience. As you can see from the examples below, McDonald’s and Starbucks rely on location services to enable their store finder and delivery services. If a consumer provides only their approximate location, a restaurant’s ability to direct that consumer to the best location will be dramatically hampered. That means consumers may be directed to a brick-and-mortar location that is much farther away than the nearest one.
Unfortunately, consumers may elect for this heightened privacy without fully understanding the impact it will have on usability.
Another big (and unannounced) change introduced with iOS 14 is a significant erosion of the data rights that companies have with regard to their customer data. First, Apple has rolled out intelligent tracking prevention (ITP), which turns off third-party cookies across all iOS browsers. Ultimately, this will severely inhibit even simple use-cases such as website visitor retargeting/re-engagement, as well as seriously weakening traditional DMP solutions.
And that’s not the end of it. Apple had announced dramatic changes to in-app tracking that were held back from the recent iOS 14 release at the last minute. We can expect that they will be launched in early 2020, so let’s look at those.
First of all, consumers will need to opt-in to any future targeted advertising. Here is a sample dialog released by Apple:
At first blush, most retail and restaurant marketers may not think that this applies to them. These companies’ apps are not advertising-based. But there are serious implications as to what this expected Apple policy means for the use of customer data capture on iOS devices.
Apple basically says that if consumers don’t opt-in to “Allow Tracking,” any data collected on them via a mobile device cannot be shared outside of a “company” for the purposes of targeted ads. These other companies can include Facebook, Google, or anywhere you might run targeted or re-targeted ads. The iOS device will also set the IDFAs (ID For Advertisers) to all zeros if consumers don’t opt in. So mobile marketers will no longer be able to collect this addressable identifier.
In a nutshell, if you build direct customer relationships with consumers by getting them to download an iOS app, you won’t be able to target those users anywhere else, unless you get them to agree to “Allow Tracking.” This is a very heavy-handed policy that reduces the power of retailers and restaurants to market to their own customers.
There are two pieces of very valuable data that TrueData believes may be governed by this new Apple policy: registration data (like email address, name, etc.) and IDFAs. These two data identifiers are the primary ways in which omnichannel marketers build consumer addressability.
For example, here is a new product launch use case that could be disallowed:
The marketing team of a QSR is getting ready to launch a new seasonal lunch product. They have analyzed the usage of their mobile app customers. Their data analysis verifies what is true of most QSR customer bases: their mobile app users tend to be their best customers. The marketing team identifies a customer cohort that has the highest recency and frequency (R/F) of visits and orders, a/k/a their “whales.”
To drive the success of the new product launch, the marketing team wants to reach these high-value customers with a targeted ad campaign. They export the list of Advertising IDs and email addresses they collected through their mobile app and upload them to Facebook to run their retargeting campaign. Where the QSR does not have an IDFA on iOS 14 devices, they select the email address the user registered with.
Although there is nothing technically stopping this QSR from leveraging their iOS app-collected email list, the use case above clearly goes against Apple’s future policy as they have communicated it. The QSR is sharing data they collected in-app (an email address) with another company (Facebook), which is only “approved by Apple” if a user opts-in via the Apple iOS dialogue window.
The workarounds to regain control of your customer data from Apple are not particularly elegant. Some companies are planning to ask consumers to register via a browser, but we know how bad the hop from an app to a browser can be. Other companies we have talked to are not planning to collect tracking consent at all, but it is not clear how much that runs afoul of Apple’s policies.
What is clear is that Apple is taking a much more activist role with its technology and how the ecosystem can use it. Retailers and restaurants will have to address the technical and data policy changes that these changes will require, adding additional burden to their already overworked tech and marketing teams. Explore how TrueData can help.
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