Consumers Say, Show Us The Personalized Value, We Will Show You Our Personal Data

The value exchange principle for personal data is starting to become more explicit among consumers. According to IBM’s latest survey of over 30,000 retail consumers worldwide, the percentage of people willing to share their GPS information with a retailer doubled to 36% in the last year alone. Almost as many (32%) are willing to trade their social media handles for some demonstrable value. Remarkably, 38% of those surveyed said they would share their mobile number in exchange for personalized services.

And there is the rub. With greater awareness of the value of personal data in the new digital economy, consumers are getting savvy and more explicit about what they expect in return. More personalization of offers and content appear to be priorities among these digi-savvy shoppers, IBM reports.

IBM found that consumers voiced a preference for five key omnichannel capabilities from retailers. They expected to find price consistency across channels. They wanted the ability to ship items to their homes when they are out of stock in store. They want to be able to track orders. They expect consistent product assortment across channels. And they want to be able to return items they ordered online to physical retail stores.

In surveying consumers, IBM was able to align digital behaviors with the level of shopper engagement with available digital tools. For instance, at the top of the pyramid of digital sophisticates are 12% defied as “trailblazers.” This is the sliver of consumers who use technologies liberally across all channels and often choose retailers based on their technical capabilities.

Another 29% of shoppers use the technologies extensively throughout the purchase process, including the final buy. The largest share of consumer, however, 40%, are using digital tools like social media, location-aware apps and mobile media to gather information about the shopping experience, but are not likely to use them for purchasing products. And then there are the 19% who are simply out of the digital loop altogether.

Overall, however, the shift to digital purchasing is dramatic. Last year 84% of respondents said they made their last non-grocery purchase at a physical retail location. But that share dropped markedly to 72% this year. Interestingly, the much-feared “showrooming” phenomenon, of scoping items at retail and then buying them online, was not a key driver of this shift. IBM was able to find only 8% of shoppers admitting to browsing in physical stores in order to buy online, up from just 6% last year. And according to this survey, showrooming may actually be having a declining influence. In last year’s survey, almost half of online purchases were preceded by in-store browsing for the item, while that figure dropped to 30% this year.

IBM of course is selling its own big data and cloud computing solutions, so its conclusion is that retailers need to integrate data in real time for better omnichannel, personalized service, since consumers expect their data to be used wisely to streamline and personalize services.

Well, probably. There is no doubt that personalization will be one of the big big data pushes in the coming year. To some degree the migration to mobile media demands greater customization for individual consumers, simply because space and navigability demand it. But we have been waiting for effective personalization of digital experiences for over a decade. Only a handful of retailers like Amazon have really shown they can leverage incoming user data effectively to contour experiences.

It's my experience that personalization is not just something that is managed technically. It needs to be communicated effectively. The end user has to see and feel the experience as somehow customized. As my wife and I drill deeper into mobile and digital engagements with all of our regular retail haunts, from grocery to books, we often find ourselves promised personalized treatment, but it is hard to recognize it as such. The “just for you” offers we get by app or email don’t always feel quite right. It's hard to tell whether the featured items really have been influenced by my past activity, or if they are just the standard promotional efforts in a faux-personal frame.  

Ultimately, how does the consumer regard this kind of exchange: as an expected and inconsequential “fib”? A technical malfunction? Or a misuse or squandering of the data I am agreeing to give them?

This is one of the underappreciated consequences of “personalization.” It initiates a conversation that includes certain implied promises. If you aren’t ready to follow through on the promise, it might be better not to raise the topic at all. It retailers aren’t ready to walk the walk of personalization, perhaps they shouldn't talk the talk.  

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4 comments about "Consumers Say, Show Us The Personalized Value, We Will Show You Our Personal Data".
  1. Paula Lynn from Who Else Unlimited , January 14, 2014 at 1:28 p.m.
    Greed and selfishness will do them in.
  2. Lisa Roberts from Compare Metrics , January 14, 2014 at 3:48 p.m.
    We have our sites set on this issue, as well! Usability studies have shown us that shoppers are frustrated that they don't have more (explicit) control over their experience and feel like it's much too black box. An exciting challenge to say the least!
  3. Al DiGuido from Optimus Publishing , January 15, 2014 at 9:36 a.m.
    Your best customers will demand a level of personalization in the way that you communicate with them. We have seen this from the dawn of time. Retailers who do not connect with their best customers and provide them the products, services, value that they desire have seen an exodus of those customers from the "active" portion of their databases. There are no protest marches...The consumer who desires a more contextually relevant relationship and doesn't get that with their current provider will move on to another supplier who values the customer more. Amazon has been using this method for years...and crushing their competitors...EVERYONE in the retail space who hopes to be viable in the digital space needs to think and act as a direct marketer.
  4. Lauren Pedersen from Cxense , January 15, 2014 at 3:45 p.m.
    True personalization will help capture the minds (and wallets) of consumers, but in some industries personalization can be very effective while also remaining unintrusive. In publishing, for example, new solutions relying on the power of big data can help create a highly personalized experience for readers, in both the news and ad content they see. Amazon blazed the trail for personalization in e-commerce, and I believe 2014 will be the year in which we see publishers reverse their years-long decline specifically by employing personalization techniques designed to keep both readers and advertisers coming back for more.