As consumer demand for a tailored retail experience grows, so too does the importance of protecting consumer’s individual privacy.
Retailers are increasingly looking to use consumer data obtained both online and in-store to offer a unique, personalised retail experience.
These tailored customer experiences have a huge impact on consumer experience, with a study by Accenture finding that such gestures can have a huge impact on customers with those having bad experiences costing Australian businesses $122 billion every year.
But with the proliferation of online sales, consumer data is something that most retailers can easily access. Respecting this data is equally as important as a personalised experience, an industry expert says.
Ryan Lester, director of customer engagement technologies at LogMeIn, says that personalisation is an incredibly valuable tool to help foster customer loyalty, and it’s a tool that is increasingly available to retailers.
“Understanding your customer, better assessing their needs and responding to them in a more immediate and personalised way has become a necessity for businesses to succeed,” he said.
“Rather than instances of loyalty, there’s greater opportunity to foster an overall lifetime value. The goal of personalised customer experience is to help the customer feel better understood. When you know their needs and interests you can better predict what they are looking for. These predictions allow you to highlight what’s relevant and attractive to your customers. It also means they feel heard.
But as brands go to great lengths to collect and use the information they’ve gathered to better target and recommend offerings, Mr Lester says that they must consider the ethics of housing and using such data.
Companies need to ensure there’s a balancing act in deciding how much personalisation can be achieved and what the cost to privacy is, he says.
“There is value for the customer in having their data collected. But owing to GDPR in Europe, its global flow on effects, and the Notifiable Data Breaches scheme in Australia, there is this growing trend for transparency with data collection,” he said.
“Customers want to know where their information is going. As such, businesses need to be honest and emphasise why they’re looking to collect this information, and the purpose of it, ensuring that it actually facilitates a better service for the customer. ”
Ensuring that retailers are responsible users of customers data is increasingly important not only to build consumer trust but also in terms of brand reputation, Mr Lester says.
“Conducting business in a transparent way and protecting customer data is critical as people are able to easily find out about brands who behave unethically and will take their money away from those who do,” he said.
“Furthermore, the digital age has empowered the customer and broadened the competition. It’s not just about a retailer being compared to other retailers. They’re being compared to any and all service brands.”