New Rules for Shopper Privacy

The customer stands center stage in omnichannel retail. Earning the privilege of relationships, relevance, and reciprocity with today's informed, discriminating, and willful consumers depends on meeting each one's disposition to granting you rights to their private information in exchange for the opportunity to deliver differentiated value. From the customer's perspective it's a "give to get" proposition; from a retailer's it's "learn to earn". IDC Retail Insights' 2013 Annual Shopper Survey research and market analysis of consumers' dispositions toward "giving to get" and opportunities for "learning to earn" spotted green lights and bright red lines retailers should abide. In IDC Retail Insights’ opinion:

• Shoppers split about equally into two groups, those who choose privacy over relevancy and those who prefer relevancy over privacy (53% to 47%). But by nearly a two-to-one margin, 62% to 38%, more consumers than not believe that they do not have enough control over their privacy in the hands of the retailers they shop.
• There are financial and customer loyalty risks in following the common wisdom that your customers are the "give to get" type — disenfranchising customers who prefer privacy. Consumers segment into three "giving" types — what they will share and four "getting" types — what they want in return.
• Omnichannel retailers attract each giving and getting type in different proportions depending on their basis of competition, not based solely on their customers' age. Among the largest 12 omnichannel retailers, those differentiating on service, selling high attachment merchandise and attracting higher income customers disproportionately attract customers more disposed to "giving for getting". Those differentiating on value, selling commodity-like products, and attracting modest income customers disproportionately attract customers of the opposite ilk.
• Engage privacy spenders and guidance seekers in digital and mobile media with life-centric messages extended possibly to social media activities. Keep the privilege of personal engagement. Be cautious engaging privacy hoarders and stay on product promotions focused on product performance and benefits. Earn the privilege of personal engagement.
• Only about 50% of retailers have a formal governance process for managing "give to get" data, creating risks for those without such a process and the industry overall. On the positive side, about three in four consumers trust some non-retail brands, data aggregators such as Google, Microsoft and Apple are included. Behaviors associated with privacy spending and guidance seeking, e.g., using five or more connected devices or seven or more apps, are ascendant.

IDC Retail Insights asserts retailers that effectively manage the "give to get" exchange of privacy for the right to provide context-sensitive guidance will be successful. Common wisdom that consumers and your customers are well disposed to the "give to get" exchange will mislead the strategy and while there are concerns about access to and use of personal data in hyper-personalized offers, opportunities do exist.

"Retailers have to learn to earn the privilege of engaging consumers based on such information as activities on social network, mobile apps, third-party apps, and YouTube," said Greg Girard, program director, merchandise strategies, IDC Retail Insights. "'Give to get' dispositions aren't simply matters of age. In addition to brands serving young adults, those that provide superior customer service, sell high attachment products, and cater to higher income shoppers attract disproportionately larger audiences of guidance seekers and privacy spenders,"

For additional information, visit: http://idc-community.com/retail.