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November 13, 2019

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Identity and Privacy in a World of Personalized Consumer Engagements

April 1, 2017

 

Consumer identity and Privacy

 

During our earlier posts, we highlighted the need for retailers to develop a relationship with their customers and the delivery of a personalized experience. Of course, the primary assumption in this recommendation is that you can specifically identify the consumer.

 

There are two challenges with this situation. The first challenge is the ability to recognize the consumer and physically identify them. The second challenge is focused on the consumer privacy issues.

 

Identifying the Consumer

 

We believe that there are five key components of consumer engagement. The five key components include:

 

  • Identifying the consumer

  • Understanding the consumer actions and behavior

  • Analyzing the data and creating insights

  • Developing a personalized experience

  • Delivering the experience

 

Clearly, in order to deliver a personalized experience, we must know something about the consumer. The ideal scenario is to know the specific individual. However, identifying the consumer can range from knowing something about the consumer to knowing the specific person.

 

For example, there are video and image recognition capabilities that can be built into the consumer engagement solutions that will allow you to know the gender, age and other factors about the consumer. Using this information you will be able to deliver a more tailored experience for the consumer.

 

However, in order to deliver a truly personalized experience, it is important to know the specific person. Many retailers use loyalty cards to identify the consumer. However, in most cases, this approach is only relevant at the end of the shopping journey during the checkout process.

 

Online retailers have a clear advantage when it comes to identifying the consumer. They have the ability to leave identifiers on the consumer’s systems in the form of cookies. These cookies help the retailer identify repeat customers and know what the consumer was interested in during their last visit. The physical brick and mortar retailer does not have this capability. Most of the time, they don’t know when a repeat customer is in the store or what the consumer is doing during their visit.  

 

In order to deliver a personalized experience during the consumer’s time in the store, it is necessary to use technology that will be passive throughout the process. The best technology will be something that the consumer has with them constantly and considers it very personal. The technology also needs to be capable of providing a signal that can be interpreted by the retailer’s in store technology.

 

With this in mind, the best option currently is to utilize the consumer’s mobile phone. We can use the radio signals from the phone such as Bluetooth Low Energy (BLE) to identify the consumer when they are navigating in a store, standing in front of a digital sign or engaging with a kiosk. BLE is the same technology that is used by Beacons.

 

We also see a time in the very near future when wearable technology will be in widespread use and can be the personal identifier for the consumer in the same manner as the mobile phone.

 

Consumer Privacy

 

Of course, no discussion about consumer engagement would be complete without the consideration of consumer privacy. It is critical for all retailers to protect consumer data and respect the consumer’s privacy. Under most circumstances, gathering information about specific consumers require their opt in and consent.

 

However, retailers need to understand privacy in much more nuanced terms. Consumers are generally willing to exchange some degree of personal information with the retailer for value. The greater the value, the more information the consumer will be willing to provide. This is especially true with younger consumers who have a very different perspective on privacy than their older counterparts. The use of social media changes the dynamics with privacy but does not make it any less critical for the retailer to respect the consumer’s privacy.

 

The value exchange is a critical component to the process. Consumers want convenience and value. Retailers must therefore not abuse the consumer’s trust and provide timely, relevant and beneficial value in exchange for the consumer’s information.

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