COVID Fallout: The Heightened Importance of Owned Marketing
The impact of the COVID-19 pandemic on the e-commerce landscape has been widely discussed and documented. With offline alternatives temporarily shuttered, brands and businesses that typically would not have considered selling online set up digital storefronts to stay afloat. In parallel, consumers grew more comfortable with digital purchasing experiences. But beyond the obvious acceleration, COVID also created some notable disruption in the e-commerce industry, further underscoring the importance of owned marketing in building strong customer relationships and navigating rapid shifts in supply and demand – trends that only served to reinforce our enthusiasm for the Klaviyo mission.
First, the influx of new brands aiming to sell online has resulted in more competition and driven significant increases in CAC (customer acquisition costs). With low barriers to entry and readily available software solutions supporting the process for brands without a lot of technology experience, competition has naturally grown.
Further, new efforts by platform companies including Apple, Google and Facebook to heighten user privacy, increases the likelihood of unexpected changes. Platform changes are often unpredictable and can result in restricted access to consumer data, leaving marketers to worry about finding new ways to connect with their target audience, which we believe will result, once again, in higher acquisition costs. Notably, the iOS14.5 update – which now requires iOS apps to prompt users to opt in or out of tracking when they first (re)open an app – throws a wrench in marketing measurement and targeting capabilities, and drives further increases in CAC since iOS accounts for such a large percentage of ad inventory. This shift in data capture reaffirms the importance of owned marketing and reducing your brand’s reliance on third-party platforms to gather and store consumer information.