(recorded December 29, 2020) - 1 hour, 32 minutes
APPLE CHANGING PRIVACY: Apple is changing tracking permissions in iOS 14. Sometime in early 2021 people have to opt-in on every app in order to be tracked. Apple is turning off all tracking as the default setting within apps.
What this means is that the personal tracking data collected through the apps will not be available unless we give each app permission to track us. This will be great for personal privacy, but it will be very bad for the targeting ability of businesses.
Once this iOS feature is enabled, all app developers will have to create a new screen in their app that shows the user the option to opt-in to being tracked and the option to see personalized ads. So far, I have not seen any app that has ever had a setting like this. Remember, that we have a choice on websites right now to stipulate if you want a cookie to track you or not, and we can turn them off, but we do not have that ability in the apps on our phones.
I expect that the majority of users will not allow the tracking or the personalized ads. In turn, this means that Facebook and Google will lose a lot of their tracking data sources. It also means that advertisers will not be able to serve personalized ads to app users. Without personalized ads all businesses will be forced to use broader advertising targeting, or not targeting at all.
The prediction: Apple was the first company to say they would not support Flash. Slowly everyone dropped Flash. Did you know that Adobe is officially killing Flash as of December 31st this year?
After Apple launches this new "opt-in required for tracking" it will cause others to follow along. As it is, Firefox already blocks 3rd party cookies. Safari on the MacBook doesn't even allow Facebook pixels any more. The ability to target people based on their personalization is going to take a big hit.
As of today, targeted ads are available seamlessly across Facebook, Google, websites, and apps. 15 years ago every ad platform was an island. Facebook ads were only on Facebook, Google ads were only on Google search. Yelp ads on yelp, and so on. Eventually Facebook developed an advertising network and Google developed an advertising network across which people could be targeted and see personalized ads.
As privacy becomes a thing, the advertising methods are going to be beaten back into isolated silos of multiple websites owned by one company, but hopefully not back to individual islands. For example, we can call Facebook and Instagram individual islands, but they are both owned by the same company, and therefore they belong in the same silo.
Right now, when using the Facebook and Google ad networks you can set a single ad budget of $500 and your ad might appear across hundreds of apps or websites. That's a single budget that gets automatically spread everywhere.
Once this privacy is put into place, it's going to force small businesses to set budgets according to silos of apps or websites. That's more ad budgets that you have to allocate rather than sharing a larger budget and having the system share the money as appropriate.
I foresee that targeted advertising options will be reduced, which means we will have to go back to broad targeting of advertising. With broad targeting you have a much lower ROI, and therefore a lot of your marketing money is wasted.
The last 15 years of digital advertising have been a dream because of amazing targeting. In the past we would spend $300 for an online ad that thousands of people would see and you would hope that at least 10 people would click on the ad. Think of traditional media, like newspapers, bulk mail, and billboards have a less than 1% response rate because there is no personalized targeting. With traditional media marketing you never know who is going to see your ad, and most of the people seeing it will not care. In 2003, as personal targeting of digital ads was in its infancy, it was quite easy to see the benefit of paying for targeted online ads at a fraction of a cost of traditional media. Better targeting meant better ROI, and the online tracking could tell you exactly how good or bad your ads were doing.
It seems like online advertising has past the height of its heyday. Personal information was taken advantage of to create beneficial advertising systems for businesses, but now that privacy concerns have been pushed into public consciousness and concern, these advertising methods are all going to change and the cost of online advertising will increase, and the ROI will decrease, because of it.
SOCIAL MEDIA AD COSTS: I have seen a decline in the organic, non-paid reach, on Facebook and Instagram in 2020. I don't have the final numbers yet, but in 2019, according to Hootsuite, the organic reach for a page had dropped to about 5.5% for small pages and even lower for pages with massive follower counts. It was disheartening to see post to a FB page that said only 7 people saw it. Yet if you throw $30 at FB you can get 1500 people to see a post. I expect to see this even more. Ever since Facebook announced their pay-to-play changes for pages the reach has dropped every year. I expect this trend to continue downward. The organic reach is so low right now that, even if you follow the tricks and tips from experts for improving your organic reach, it's a losing battle.
SOCIAL COMMERCE: Related to social media is the idea of social media checkout. I don't see social media checkout making any real advancements. I simply do not feel that shoppers will want to share their payment information with another platform. I feel that jewelers should still use the features on social platforms that invite product browsing, but the checkout should be directed to their website instead of the social media system.
As more people learn about privacy issues, I feel it's more likely that consumers will reduce the number of ways they share their payment information online. I see an increased trust in larger payment systems like PayPal, Google Pay, and Apple Pay and more willingness to share payment information with larger online retailers that offer a variety of product types. For small businesses this means using PayPal or Google Pay on your website rather than asking for someone's payment card information directly.
I've also been watching a lot of the trends about digital currency, like Bitcoin, but these payment types have already been around for years and I believe there won't be a huge surges of interest until they are incorporated into PayPal, Google Pay, or Apple Pay.
ECOMMERCE: For several years we've known that mobile web browsing accounts for more than 50% of website activity, and now it seems like mobile ecommerce is quickly approaching the 50% point as well. According to Comscore.com, mobile ecommerce accounted for 44.9% of all US sales on Thanksgiving 2020. For Black Friday 2020 mobile ecommerce accounted for 41.8% of all US sales. For Cyber Monday 2020 mobile ecommerce accounted for 38.9% of US sales.
My 2021 prediction is that mobile ecommerce will just about reach the 50% mark on average for the entire year. This means you should be revisiting how your mobile jewelry ecommerce site functions, what it looks like, clean up bugs, and retest the checkout process to make sure it's smooth.
The covid pandemic accelerated the adoption of omnichannel by many businesses simply because consumers wanted better customer service options. I expect to see more cloud based services emerging in 2021 that will help small businesses, but I also see that small businesses will be slow to adopt them and
ONLINE EVENTS: Even though everyone might have fatigue with zoom meeting and events, we're still going to be stuck without a lot of direct human interaction for the first 6 months of 2021. Jewelry trade shows have already been canceled through February 2021, and those that are still held will have lower attendance for the first half of the year.
Therefore online events will continue, but there are a lot of shortcomings in the way online events have been held so far. Many of them are nothing more than long infomercials for brands. In order for these events to be worthwhile, they need to transform into something more meaningful, and they need to have a carefully thought out follow-up plan afterward.
In 2009 the marketing world was very big on "product launches" which refers to how a marketing companies would spend a lot of time and money to promote some type of online video event. This was usually something educational with a sales pitch at the end. They would hype up the online event for a month or more beforehand and send out reminder emails as the day and time grew closer. This strategy would typically result in hundreds of people attending these product launches. What's surprising to me is that, with all the online events popping up in 2020, there was such a rush to do something that the preplanning and follow up planning was completely skipped.
Businesses were so concerned about keeping connected through an event that they forgot to stay connected after an event. With the outlook of another 6 months of social distancing before enough people are vaccinated, I feel we will see several companies that give up on online events because they feel they are a waste, and we will see several companies that realize that the previous methods of product launch marketing will be joined with online events to make them more successful.
Reed Expo, the owner of JCK, reformulated the June JCK show into a virtual event. They promoted the event before hand, but they didn't reveal too much about how it would work and what was really expected of people. After the event was over I didn't feel there was enough follow through. The companies that have previously hosted in-person events will have to realize that their playbook for making those events successful does not translate to the virtual environment.
ECONOMIC RECOVERY: When everyone got their stimulus checks in April it was still believed that life would go back to normal shortly thereafter. Many people treated that stimulus money as disposable income. I don't feel that we will see the same thing happen this second time around. I think those who receive their $600 stimulus are more worried about their unemployment, paying bills, and buying food.
Brick-and-mortar retail will continue to suffer the most for the first 6 months of 2021. Even after the vaccine is widely distributed, I feel that it will be a while before we all feel safe enough to return to our 2019 routines. Honestly, I think the 2021 holiday season will be when we begin to see in-person shopping getting close to returning to normal. Families will cautiously gather for Thanksgiving and hope that there won't be a spike in COVID cases like there were in 2020. Once they see that the vaccine has worked and the number of cases didn't spike, then more people will venture out for in-person shopping.
Jumping forward to early 2022, I believe that we will all closely watch again to see if there was a spike in cases after the holiday gatherings. This will be the public proving ground. Once we all see that the spike in cases was averted, it will be like shooting a gun off at the beginning of a race. We will see a huge reversion back to in-person activities and shopping as we all finally feel safe enough to reclaim out 2019 in-person routines. That's a year away.
Economically, that means 2021 will start with a slow recovery of sales for brick-and-mortar stores with ecommerce still gaining. The in-person recovery will improve steadily throughout the year as more people are vaccinated. In December 2021 and early 2022 is when we will see a huge rise of in-person sales and a drop in ecommerce sales, but I believe that reversion will be short lived as people are longing to get out of the house for any reason. That's also when we will truly find out if the new online shopping habits being formed today will continue. I feel that after a short term drop in ecommerce sales, we will see a rise and leveling off.
With all that said, keep in mind that I just gave a quick overview of how I see the next 13 months based on how I've been studying unemployment, stimulus money, behavior, and economic recovery for the last 9 months. A lot has changed in those 9 months. Remember that people are still buying, they are just buying online. Jewelers who want to stay in business need to implement some type of online shopping.