Personalisation and the fine line between value and breach of privacy

Antoinette Ienco discusses how retailers can maintain customer trust while utilising the personalised retail experience.

When it comes to personalisation, retailers walk a fine line between providing value for customers and a potential breach of privacy. Exponential growth in the volume of customer data collected across multiple channels has raised concerns for consumers as they worry about who has access and how the data is being used.

Capgemini’s new report, ‘Privacy Please: Why Retailers Need to Rethink Personalisation’, is based on key learnings from more than 220,000 targeted social media conversations relating to 65 global retailers and explores how they can maintain customer trust whilst using data to personalise the retail experience.

Customer sentiment

The study found that 82% of Australian consumers like personalisation initiatives adopted by retailers. On the other hand, only 2% of those surveyed felt that data collected by retailers was adequately secure, suggesting organisations need to do more to ease customer concerns.

It’s clear that retailers are struggling to strike a balance: our report found only 14% of retailers achieved positive customer sentiment on both personalisation and privacy initiatives. These figures are no doubt influenced by the recent and highly publicised spate of security breaches experienced by well-known and respected retailers around customer data, which has caused continued concern from a majority of consumers.

Consumer trust

Consumers generally don’t trust retailers to protect their data from hackers; they don’t believe that they have sufficient control over their data and it seems that no matter how much data they provide, they are always being asked for more. It’s time for retailers to stop trying to gather more data and focus on providing value with what they have.

Retailers need to communicate more openly and provide greater transparency on the types of data stored, with whom the data is shared and how the data is used. They need to give consumers greater control and reassure them that all measures will be taken to protect their data and respect their privacy. Policies and strategies to protect data need to be communicated clearly and consistently.

Data-driven insights

Consumers want to see tangible value in exchange for handing over their personal information. Retailers need to focus on extracting insights from the data and utilising these insights to provide consumers with personalised offers that are relevant. The conversation with the customer needs to be authentic and must happen in real-time. Sending an irrelevant offer or bombarding the consumer with emails will only serve to frustrate and convinceyour customer that you don’t understand them – definitely not a good way to build trust and loyalty, and in many cases, can result in lasting damage.

The report shows that retailers who increase their ability to extract and harness insights also increase their ability to connect and drive greater brand loyalty. Global retailers who have achieved this have also enjoyed significant increases in revenue and profitability, so it’s clear that smart use of data can deliver significant benefits across the business.

Australian retailers are aware of this and are actively working on improving their data capabilities to personalise the customer’s experience while protecting their privacy.

Digital solutions

Digital solutions provide retailers with the capabilities to engage consumers across all channels, however, they need to be mindful that these solutions add value and aren’t intrusive. Having a single customer view is vital to bridging channels and enabling the seamless shopping experience that consumers are demanding.

Retailers which received positive feedback for their personalisation and privacy processes were consistently doing three things – giving the consumer control and personalising their experience to deliver value, using  technology to drive customer satisfaction (not just as an enabler) and providing a clear governance framework for privacy and personalisation. Australian retailers need to reevaluate their current privacy and personalisation processes and use data and insights to restore trust and drive better experiences for customers.

The Consumer Engagement Principles currently being developed by the Consumer Goods Forum are aiming to provide a common framework for how companies should engage with their consumers and promote trust through open communication. Retailers can look to these as a benchmark for best practice when it comes to customer personalisation and privacy. This is one step on an enduring journey to build a mutually beneficial relationship that provides value to both the retailer and the customer.

Antoinette Ienco is director of Capgemini ANZ.