Retailers have to walk a tightrope of how to personalize and engage
You're leaving digital footprints everywhere … and they're following you
Amazon receives tremendous accolades for the levels of service they provide, which in turn generates incredible consumer loyalty. They also benchmark at the highest conversion rates and shopping cart attach rates in the industry. How do they do it? They have invested an incredible amount of infrastructure and technology to track your "digital footprints". It starts with the "cookies" from your computer accessing their website, and continues with every click and page view.
One only needs to peruse the headlines to see the growth of "mobility". Most stats indicate that smartphone growth is 20+% annually. Consumers spend more time on the internet using their small screens (smartphones and tablets) than via computers. What does that mean? The mobile world is an "app world". Mobile apps create a whole new opportunity to track digital footprints anytime and everywhere. But, apps do something else. They create a tremendous opportunity for digital interaction enabling personalized service and offers based on what you click … AND where you physically are located at this moment.
Mobility opens whole new realms of "mass personalization"
Advertising Age reports that the Major Baseball League has a new smartphone app called "At the Ballpark". This app has the ability to "welcome" you to the ball park. By using sensors, the app can personalize your ball park experience by alerting you to significant pieces of baseball history, or directions to refreshments or restrooms. Of course, the baseball app also enables vendors to sponsor messages and serve up offers on your smartphone.
The whole value prop of the Major League Baseball app is to create a customized, personalized experience. Not only does it help you navigate the ball park, it has the potential to serve up specific stats, or video clips that are literally at your fingertips. The opt-in ballpark app is the ultimate personalized experience AND loyalty program. It enables you, the fan, to track your favorite team, your game attendance, personal highlights, as well as take advantage of personal offers and discounts. You can direct your personal experience.
When things get "creepy" consumers rebel against loss of privacy
The critical part of the "At the Ballpark" app is the "opt-in" component. If fans perceive value, they can choose to opt in. If not, they don't have to opt-in for a game, or they can delete the app entirely. With opt-in apps, you, the consumer, have some control over your digital footprints and the amount of "personalization" you desire to receive and engage in. If the app generates experiences ball fans value, it will become a significant loyalty program much like those of a Tesco.
All this sounds great for the consumer and the retailer. What happens when the consumer perceives a line of privacy is crossed and they become "creeped out" and turned off? The danger with mobile phones is that you can be "tracked" if your phone is turned on and you haven't even opted in to an app. One recent example of creeping out the public occurred in the UK. Tracking sensors were put in trash bins to track traffic patterns and flow. When the public found out this was being done without their knowledge, they rebelled and demanded that the trash bin sensors be removed. The boundary of privacy had been crossed, despite any public benefits derived from the tracking. One only needs to do a search on "NSA" to get a sense of the rising paranoia over invasion of privacy.
Consumers know when they feel violated … and they won't come back
Mobile devices perhaps represent the greatest opportunity for retailers regarding personalization. By tracking your phone location retailers can recognize your presence in the area and even within the store. They can then direct personal messages and significant discounts to your phone. But just how much of your privacy do you want to give up in order to receive a discount? Are you comfortable if a restaurant or hotel tracks your behavior if you haven't opted in?
And, it's not just on smartphones. It can just as easily happen on the internet. I recently went shopping for a new automobile online. Why go to the hassle of driving to each dealer to see a car, and then have the unpleasant experience of haggling with salesperson who is on commission? I went online with my computer to a couple of websites to search for car specs, prices, and availability at local dealerships. I don't know what I clicked, but I was suddenly deluged with email offers and the phone still hasn't stopped ringing. If you want a similar test, use your computer to go online to any popular home refinancing site, and see what happens if you even partially complete any application forms.
Personalization … great Opportunity and Threat for future of retailing
Everyone likes to feel special. And, who doesn't like a great deal … especially on products that you really want? Our digital footprints are literally everywhere. With our smartphones, we are creating trails of our presence without even knowing it. The ability to personalize offers and service to individual consumers is powerful, and potentially profitable. Personalization enables retailers to create differentiation. To some degree, many consumers will, or have come to expect new levels of personal service and experience.
With power comes responsibility. The ultimate power is the fact that consumers vote.
If consumers become "creeped out" by some service that they perceive is an invasion of their privacy, they will quickly vote with their wallet elsewhere. More importantly, they will tell everyone on social media about retailers who are "out of bounds" and should be avoided.
3 Critical Retailer Considerations for Personalizing service via Technology:
- Providing the consumer the ability to opt-in and out will be increasingly important.
- Demonstrating security and anonymity in tracking data will be highly valued.
- Having public, stated policies and guidelines on consumer tracking, loyalty program requirements, and use of personal data will be essential.
Yes, I know that many will say that the items above are already in place. Maybe, but it only takes one incident of "privacy invasion" experience to lose a loyal consumer for life. The issue of privacy versus personalization will become very strategic in the future of retail.
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Sources:
- MorningNewsBeat: FaceTime with the Content Guy: Connectivity, October 3, 2013
- CBSNews: U.K. bars trash cans from tracking people with Wi-Fi, August 12, 2013
- Tight Rope Image: David Castillo Dominici; Freedigitalphotos.net
- Digital Footprint Image: Khunaspix; Freedigitalphotos.net
- Promotion on Smartphone Image: Stuart Miles; Freedigitalphotos.net
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