How Data Trading Affects Your Shopping Habits And Privacy [Future of Retail]
Customers are willing to trade personal data, as long as they get something in return.
Think of the last product you researched online. Whether it was a purse, a new toaster or a pair of shoes, chances are that item started following you around the web. Increasingly our shopping habits are being tracked in the hopes of learning more about us and driving us to sale. What’s more, thanks to our mobile devices, this monitoring is no longer confined to the digital realms as brands and retailers try to understand where we shop, what we look at and for how long. But as people have become aware of this clandestine activity, they’ve begun to raise questions about invasions of privacy, which has put the entire data-gathering process under scrutiny. But what if this tracking was transparent and what if shoppers were rewarded for sharing their personal details?
In a trend from our Future of Retail report called Data Trading Systems, the team at PSFK Labs found that retailers are brands are starting asking their customers to swap their data for better deals and service. By openly gathering data around shopper interactions, businesses are able to generate insights that can influence decisions about everything from marketing executions and inventory to pricing and store design. In return for providing this information, customers benefit from receiving something of value that improves their shopping experience. Read on below about the innovative examples we see signaling a change in the business-to-consumer relationship centered around data.
Swirl is an app and mobile-marketing platform that provides users with highly relevant in-store discounts by tracking their location in a retail environment. Retailers are able to follow shopper location, see what they are spending time looking at, and push tailored promotions based on a shopper’s preferences and in-store journey. Users are automatically eligible for deals, new releases, and promotions they are interested in. Since shoppers are connected on their smartphones in-store looking up prices and sharing, Swirl presents retailers with an opportunity to engage with customers at a critical stage of the purchase path. By helping people reach a purchasing decision in a specific part of a store, brands can create a personalized experience for the shopper, as if the brand is aware of their presence and accommodates it.
“Shoppers are more likely to share personal information with retailers if they receive value in return, but they must retain control of how their personal information is shared.” – Hilmi Ozguc, CEO, Swirl
Navigating the pages of coupon books for groceries and pharmacies can be daunting, particularly when one doesn’t have a lot of time to flip through and analyze the deals versus needs. National pharmacy chain CVS has begun giving ExtraCare loyalty members personalized weekly ads based on past purchases and customer preferences. Using data gathered from members’ past purchases, the My Weekly Ad program preselects what they see online and on mobile devices, and sends emails of offers and coupons so customers just see what’s relevant to them, and are more likely to redeem the offers. In addition to saving paper, the effort intends to save customer time and improve their shopping experience by pre-empting what they want and need so they don’t have to search for it.
“Consumers have become more willing to progress the relationship, and [consequently] there are more things they will give up in exchange for what a brand will give up to them.” – Bob Macdonald, President and CEO, Maritz Loyalty
Data is money. Personal data is worth even more money. Data company Enliken is getting users to volunteer that valuable personal data by giving them a share and say in how it is used. Capitalizing on the insight that consumers share more information with companies that respect their privacy and preferences, Enliken is building user trust with a personal data manager in the form of a web browser plugin that lets users determine what information it collects. In exchange for the data sold to advertising companies, Enliken gives consumers a cut of around $1 per month that they may direct to a charity of their choice. Instead of getting no returns for their data, consumers can now earn a passive income while Enliken creates a consumer-driven marketplace of verified data that encourages advertisers to be more open about how they use personal data.
The Data Trading Systems trend is part of a bigger theme called Data-Driven Commerce Systems. When implemented, these information tools enable any organization to dynamically respond to changes in the marketplace, develop better tools for customers and staff and add efficiencies into the shopping experience.
The 2014 edition of the Future of Retail Report is now available from PSFK Labs. The new survey describes key trends driving the retail experience and the findings are brought to life with best-in-class examples, actionable strategies and leading questions to inspire leading retailers and brands.