With eight out of 10 U.S. consumers worried about their digital privacy, retailers need to walk a fine line of using consumer data effectively, but without scaring off the customer. While some data is necessary to make a shopping experience personal, other uses of it can feel invasive and have the opposite affect on shoppers.
In an age of privacy, a customer’s primary fear is that their data will fall into the wrong hands, according to Tara Kelly, CEO of SPLICE Software. But Kelly admitted that this is a perfectly rational fear, considering the volume of high-profile data breaches in the news over the past few years.
Essentially, data is collected because it has so much potential to make life easier and the shopping experience more pleasurable for both customer and retailer. But, the most important aspect to collecting the data is how it is applied.
“I think ‘small data’ doesn’t get the attention it deserves,” Kelly told FierceRetail. “Small data includes the details companies collect from their customers, such as contact information and permissions and preferences for how they’d like to be contacted. The information retailers collect from a loyalty program, for example—if a customer shares her mobile number and gives the retailer permission to use it, that’s an invitation to become part of the customer’s life. It’s incredibly valuable.”
So how does a retailer get personal without getting too personal? Kelly said personalization should be in the context of the “micro-moment,” which Google defined as the instant when consumers reach for or speak to a device to learn about a service or buy something. When retailers respond during a customer micro-moment, applying the data responsibly, the customer feels good about the personalization.
While the comfort with giving up personal data varies by age (younger consumers more comfortable giving out information for something in return), most consumers these day expect some level of retail personalization.
“They aren’t just comfortable with it, they expect companies they’ve done business with to know who they are and understand their preferences, from their Netflix top picks to purchase recommendations from their favorite online clothing outlet,” she said.
While some traditional retail divisions traditionally focus more on customer outreach through data collection, most retailers are now seeing the value in the exchange: Collect data and offer a discount, points, an experience, etc. in return. And as more and more commerce is conducted via mobile and artificial intelligence platforms, even divisions that weren’t focused on data will need to embrace the idea of gathering and correctly applying information.
So what personal questions might consumers find “creepy,” when asked by retailers?
Kelly said that any questions that don’t have a clear line to value can be considered intrusive. So the best way to avoid the “creepy” tag is to make the value exchange clear.
“But it’s also vitally important to collect customer permission for future contact, because even the use of publicly available information can seem creepy if the customer doesn’t expect it,” she said.
Personalization is continuing to evolve. With the rise of data-driven artificial intelligence such as Amazon’s Echo and Google Home, retailers have a new platform for communicating with consumers in the intimate setting of their homes. Kelly calls this prospect exciting and for retailers that start using these channels now, they have the opportunity to gain the competitive edge.