Personalize by Respecting Privacy Concerns

The National Retail Federation reports that retailers today want to personalize each customer’s shopping experience. The retailers say they’re collecting and analyzing information about their current in-store shoppers (two-thirds of NRF survey respondents call it a priority) and increasingly profiling online shoppers (almost half say it’s a priority).
     Are you already great at personalizing the shopping experience? Then the NRF report serves as a reminder to think about alternatives for obtaining the necessary information:

• Legacy data mining includes looking at forms, such as a customer’s frequent shopper enrollment and record of prior purchases, to discover the individual customer’s likes and dislikes. It’s most practical with major customers and business accounts.
• Explicit profiling involves asking in-store and ecommerce shoppers to complete questionnaires to tell you their preferences in merchandise, services, pricing, and more.
• Implicit profiling tracks the customer’s shopping behavior, usually without the person being aware of it. With online shoppers, the progress through a retailer’s website can be gathered using cookies. With in-store shoppers, a salesperson could observe how the customer browses and could listen to and analyze the sorts of questions the shopper is asking.

     Although it seems every shopper would welcome personalization, privacy concerns are a barrier. The Ponemon Institute, which conducts independent research on consumer trust, says that over 95% of the companies they surveyed report not fully exploiting the potential of personalizing because the companies fear customer pushback against the data collection required.
     How to break through so you’ll get the full potential as a retailer? According to researchers at Quinnipiac University in Connecticut and Providence College in Rhode Island, the answer is to tell customers what information you’d like to gather about them and just how you’ll be using the information to make their individual shopping experiences more efficient and fruitful.