Absolutely massive amounts of personal data have been generated over the past five years, much of it tied to the mainstreaming of social media and mobile device usage. Though most of it remains unstructured, this information has the potential to unlock tendencies related to behavior and preferences both at an individual level and in aggregate. Nowhere is this more true than in a retail context, where data can help companies uncover insights about shopper dwell times, purchase patterns and the effectiveness of in-store marketing, to name a few.
But despite having access to mountains of data, retailers and brands still struggle with quality. What’s more, growing privacy concerns have made shoppers far less willing to allow their personal information to be surreptitiously tracked and scraped without their knowledge and consent. This new dynamic has led to a more open dialogue between retailers and their customers, resulting a new marketplace built on an even value exchange. The emerging practice of customers sharing their data in return for tailored content, experiences and deals points to a trend from PSFK Labs‘ latest Future Of Retail Report we’re calling Data Trading Systems.
A joint study between Microsoft and IPG Mediabrands found that despite not wanting to be tracked, 45 percent of consumers said they believe they will eventually sell data to brands in the future, while the same percentage is willing to share data collected about them online if it means advertisements would be better tailored to their preferences. Another survey conducted by ResearchNow showed that 47% of women said they would willingly share their mobile phone location with a retailer in return for a $5 credit, and 83% of those surveyed would do so for a $25 credit.
We’re especially bullish on the opportunities this shared data enables around personalization, which can contribute to improved service, and experiences online, on a mobile device or in-store, helping mitigate some of the concerns related to how it’s being used. This transparency is key. As CEO of KD+E Erik Dochtermann notes ”Retailers can turn the ‘they’re spying on me’ sentiment into a ‘they’re trying to build a store just for me’ sentiment,” giving customers even more reason to shop with you. So what’s the takeaway for brands and retailers?
PSFK Labs’ Director, Scott Lachut, tells us “Retailers and brands need to recognize that in today’s marketplace, personal information is a new asset class. In the same way that your shoppers will pay for quality so should you. Show your customers that they have your respect by creating an open exchange that demonstrates that they have value beyond a string of 0’s and 1’s.”
As you begin to consider implementing a Data Trading System in your own organization, ask yourself these questions to assess your readiness:
Can you become the trusted keeper for data that your customers rely on?
How can you empower them to use this data beyond the context of your store or brand?
What services can you offer to enable shoppers to further build out the value of the data that they share?
How can you reward and thank your customers for sharing their personal information?
- What data do you want to capture and how will you use it to improve both your backend and consumer-facing operations?
In the fourth edition of the Future of Retail Report, PSFK Labs brings together two interconnected themes and eleven key trends that provide a foundation for the modern shopping experience. The findings are brought to life with best-in-class examples, actionable strategies and leading questions to inspire leading retailers and brands.