Retailers should "learn to earn"

Warc, 6 May 2014

FRAMINGHAM, MA: Online shoppers have a nuanced attitude to privacy, according to a new study which suggests retailers need to work harder on understanding how individual consumers respond to this issue.

The 2013 Annual Shopper Survey from IDC Retail Insights, part of market intelligence business International Data Corporation (IDC), found that shoppers were divided in their views, with 53% choosing privacy over the relevance of targeted communications, while 47% had the reverse outlook.

But there was a widespread belief among consumers that they did not have enough control over their privacy in the places where they shopped, with 62% thinking this way, versus 38% who did not.

"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 You Tube," said Greg Girard, program director, merchandise strategies, IDC Retail Insights.

Overall, the survey found that only a minority of consumers were predisposed towards the "give to get" exchange of private data for guidance depending on a retailer having access to such information – 14% were "privacy spenders" and 15% were open "guidance seekers".

"'Give to get' dispositions aren't simply matters of age," he added, in reference to the idea that younger consumers are more ready to trade personal data for relevant marketing.

"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'."

IDC Retail Insights further segmented consumers into three "giving" types, in terms of what they will share, and four "getting" types, in terms of what they want in return.

Retailers needed to meet each one's disposition in exchange for the opportunity to deliver differentiated value, the company said.

It recommended engaging "privacy spenders" and "guidance seekers" in digital and mobile media with life-centric messages, while for "privacy hoarders" the emphasis should be on promotions focused on product performance and benefits.

Data sourced from IDC Retail Insights; additional content by Warc staff