Personalization data in a post-GDPR world
Data Privacy and Consent Implications for Retail
With the laws tightening around opt-in consent from consumers impacting on marketable databases for retailers, it’s hard not to be pessimistic about the effect on the retail industry’s bottom line.
Retailers have not only seen their marketable databases dwindle, but they potentially lose valuable insights and data intelligence on their shoppers’ behaviour and preferences, essential to continually improve and optimize their efforts.
This isn’t just law makers making up laws to be obstructive, consumers are demanding it. Recent consumer research from RichRelevance highlighted the overwhelming consumer sentiment for retailers to be transparent on how they use data (over 80% across the US and Europe). However, there are also some positive findings, in that a third of consumers would be willing to consent to giving more personal data if they know how it is being used. What’s more, 40% of consumers value the use of their data when its used to improve their experience.
These trends serve as a wake-up call to retailers to move away from mass marketing to crafting individual experiences that are of value to consumers, in return they will not only obtain consent but gain access to data which will help further improve their marketing.
A shift in Focus
Given data privacy laws and consumer sentiment, marketing databases will no doubt diminish. Retailers will no longer be able to rely on blanket offers to generate conversions but instead must focus on more sophisticated personalized communications and experiences to build a loyal, engaged customer base.
A smaller but more loyal marketable database, will dramatically improve responses from their communications, and improve margins, without needlessly giving away offers.
But how do retailers build a loyal following? Through greater transparency and trust around what data is collected, why and how data is used. If the consumer can see their experience will be enriched as a result, they are more likely to give you consent.
At the heart of an enriched and engaging experience is personalization. We’re not talking about recognising you know someone’s name, but that you craft individual communications and experiences based on a person’s specific preferences and shopper mission.
Chicken and the Egg : Data and Insight
However, retailers find themselves in a chicken and egg situation. Without data and insight, they will struggle to personalize and enrich the shopping experience to gain consumer consent. Without consent, a retailer will not have access to the data which enables them to understand their customer, connect the dots and improve the user experience.
Utilizing AI and machine learning which uses anonymous identifiers can help retailers comply with new regulations whilst still gaining insight into shopper behavior in order to optimize and personalize the journey, contributing to improving the user experience.
Winners and Losers
Those retailers who succeed in respecting their shoppers and using their data wisely to enhance the shopping experience will be those who gain consent and can rebuild marketing databases. One to one communications are essential to the modern-day marketing and campaigns for retailers. Retailers who don’t look to compete on experience, will be those who are left behind.