Explore the best creative works

How e-commerce might function on a cookie-less web

Cadi Jones, commercial director EMEA at adtech software experts Beeswax, is often tasked with demystifying digital advertising for marketers. She’s now taking these efforts wider, this week detailing what drove the ecommerce boom and how it will change the face of consumerism as privacy regulations shake up ad land.

The pandemic has changed people’s behavior. As a community, digital marketing professionals tend to be early adopters of new technologies, and so it can be hard to notice the moment when things we’ve been doing for years become mainstream. It’s even harder during a pandemic, when we’re (mostly) confined to our homes and not mixing outside of our bubbles, to see changes that are happening with ’real people’ living outside of London, doing ’real’ jobs.

You’d have to have been living under a rock to have missed the rapid acceleration of e-commerce. The first sector to witness this transformation were the grocers. Based on Nielsen data, by the end of 2020 a total of 8.5m UK households, just over 30% of all households, were shopping for groceries online. Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “The pandemic has changed how we live, shop and consume”.

That has brought with it varied challenges across everything from logistics and fulfilment to human resourcing. However, for marketers, this brings a particular set of puzzle.

Traditional brands saw their supply chains and production capabilities disrupted significantly by the pandemic. Sectors with long production cycles, such as automotive, now struggle to catch up. There are long waits for new cars. Where production has kept pace with demand, the increase in ecommerce helps to make up for lost sales through traditional channels during the first half of 2020. L’Oréal's global chief digital officer, Lubomira Rochet, said in a recent interview with Business Insider that, e-commerce made up for more than 50% of its losses in brick-and-mortar income during the pandemic and is expected to account for 50% of its sales in the future. It already makes up a staggering 25% of their revenues, having grown 65% during the pandemic.

This rise in ecommerce presents a unique opportunity as well as a challenge for traditional brands. When the bulk of sales had historically been through brick and mortar channels, it was very hard to access data around consumers and their consumption patterns. Data would be captured via the retailers and not by the brands themselves. This opportunity to gather consumption and consumer data more readily provides a big challenge to marketers: what data should we capture, and what should we do with it? [Boots’ CMO recently opened up on this.]

For direct to consumer brands, the primary challenge has rather been how to grow their brand presence to be taken seriously. Back in the pre-pandemic days, the playbook for this was for DTC brands to spend money on out-of-home alongside digital channels. This allowed them to benefit from the halo effect of the public promise, building the assumption that they were much bigger and more successful than they were. However, with fewer people leaving their homes, and spending less time outdoors, and even the hottest spots being less densely populated, the impact of this medium was called into question.

However, these changes to user behaviour and consumption patterns meant that DTC brands had a newly available channel here in the UK and across Europe. Connected TV viewing increased at such a scale as to make it impactful. By combining OOH with CTV, DTC brands were able to build their brand to gain trusted, household name status, whilst optimising towards the relevant demographic or geographic targeting restrictions necessary as their business grew.

Across both categories, some of the traditional challenges of ecommerce remain - and look to become even more difficult in 2021. The biggest struggle for any online retailer is how to turn a first-time buyer into a repeat customer. This is especially true now, consumers have never had more choice.

Retargeting, while frequently mocked by consumers as well as marketing industry professionals, is a staple of e-commerce brands because it works. Users who have visited a brand’s website before are significantly more likely to visit again, and for most online brands, their online shoppers are more likely to repeat purchases than new customers are to make a first purchase.

With the double demise of third-party cookies in Chrome and Apple’s IDFA identifier rapidly approaching, there are big question marks around how ecommerce brands will be able to retarget effectively. They will of course be able to use their first-party identifiers to advertise within their own environments, but retargeting their customers across the open web will become more challenging.

One solution that brands are increasingly turning towards is the customer data Platform (CDP) in combination with a universal identifier solution (or solutions). This set-up may provide some success for ecommerce brands looking to continue their conversations with their consumers outside of their own environments. However, across most of Europe, and certainly within the UK, no single solution has yet to be widely adopted enough by publishers and supply side platforms to be able to replicate the status quo.

So e-commerce is no longer an afterthought for traditional brands, but instead, a significant part of their current business, and increasingly the primary area of growth.

It brings a richness of first-party data, but the challenge for that will be how to leverage it for further success and growth across the open internet. In some ways, you could take the “data is the new oil” myth, and observe that traditional brands have just figured out how they can make oil – but at the same moment as the world’s travel systems have switched to green energy. With a much greater availability of oil, how is it possible to use it within the new, identity-less environment in a more efficient and effective way for the medium-term?

By continuing to use The Drum, I accept the use of cookies as per The Drum's privacy policy