In the wake of GDPR and the Cambridge Analytica scandal the public is increasingly wary of the pervasive nature of personal data-fuelled marketing. Unsurprisingly, customers are now looking to put a price tag on their personal data, with experience overtaking price and product as a key brand differentiator by 2020, according to a recent report.
As a result, retailers are facing a new challenge as they seek to deliver satisfactory value in return.
So how did we get here? It has a lot to do with the disrespect historically shown by big businesses for consumer data. Whilst this isn’t unique to the tech world, the data abuse demonstrated by certain tech companies in the last 15 years is particularly pertinent. From emails and postal addresses to spending and voting habits, these companies have harvested and sold our information at will, making billions in the process. As a result, many tech companies are now tarnished with the same feeling of mistrust.
But this isn’t an accurate representation of all businesses, and consumers should have faith that most companies are willing to make a fair trade in return for their data.
Data is fast-becoming a new currency, and we must therefore encourage a shift to a positive outlook, with brands leading the charge towards a mutually beneficial exchange.
The more a company knows about its customers’ shopping habits, the better it can shape their marcomms strategy. With more and more consumers becoming aware of this, they can essentially monetise their unique personal insights and benefit in return.
If retailers want access to consumer data, they must be willing to provide clear benefits in exchange. When a customer knows a better experience is at stake, they are often more willing to share their information. They must clearly communicate that consumers’ data will enable them to provide a hyper-personalised shopping experience, convenience and unique discounts.
Research from Bills.com has found that 70% of consumers are willing to share their buying habits with Amazon for a discount on their next shopping cart. Similarly, a recent survey by DMA found that just over half (51%) of consumers around the world are still happy to exchange their data with businesses, as long as there is a clear benefit for doing so. This is despite 74% having some degree of concern about their online privacy.
Rewards that used to be dismissed as marketing ploys to encourage customers to return can now be much more finely tailored, with 10-times the benefit both to businesses and consumers.
It is natural for consumers to be loyal to preferred brands, but retailers must be wary not to take this loyalty for granted. Indeed, InMonent’s US Retail Trends Report found that nearly 50% of customers have left a brand to which they were previously loyal for a competitor that better meets their needs.
If retailers are to to successfully nurture loyalty, they need to focus on staying relevant, continuously improving the customer experience and providing a better level of personalisation.
And when eight out of 10 consumers now say they would be happy to share their data if it enables a more personalised experience (Accenture), retail loyalty schemes should be an effective mechanism that provides retailers with deep customer behaviour insight that enables retailers to deliver these experiences in-turn.
In recent years, the retail sector has seen rapid adoption of omni-channel loyalty programmes facilitated by the integration of technology. This has given retailers better access to data and the ability to analyse purchasing patterns more effectively than ever before to offer rewards and perks based on how customers behave.
The high street has become an impossibly competitive space for those not investing in technology. Brands are having to work harder than ever before to compete for consumer attention.
Retailers must view technology as an investment rather than a cost in today’s competitive landscape. With the likes of Amazon eating up the market and fundamentally changing the way consumers consume, intelligent loyalty programmes are providing a vital solution to retailers looking to expand their returning customer base.
We’re approaching an era where consumers will be able to reap tangible benefits from their personal data. To keep pace, retailers must look to the future and adapt to the idea that consumers will and can place a value on their data. In light of historic data abuse, it’s natural that consumers feel vulnerable when it comes to data exchange. As a result, retailers must take it upon themselves to establish trust-first relationships; only then will we see a fair share of data value.