The article below originally appeared in Total Retail and is published here with permission.
After much talk about it over the last few years, the use of big data to improve consumers’ lives seems to finally be poised to become reality, and this is opening a new level of relationship between brands and their customers.
The amount of data we have the capability to collect now is eye-opening, along with the ways we can use it. From connected cars, to smart homes, to body-monitoring apps, we have technologies that are producing avalanches of data every day. According to Gartner, by 2020 there will be an astounding 26 billion connected devices that aren’t PCs or phones in the world, up from less than 1 billion in 2009.
If we can harness this data, it can be game-changing. The idea of using big data – like demographic information, location and interaction history – to personalize engagement is increasingly appealing for brands. But despite all the possibilities for big data, one question that those of us in the mobile industry and consumer sector have been grappling with is, to what extent are consumers willing to share data in return for more customized services along their mobile journey?
It’s difficult to tell since little research has been done on the subject. This is why Syniverse conducted a study of 8,000 consumers in eight countries and attempted to uncover their attitudes toward mobile privacy. The results are surprising and make for difficult reading for retail brands as well as mobile operators.
Among the most important findings:
- 75 percent of consumers say they don’t trust brands to take care of their data.
- 71 percent say they don’t trust operators to take care of their data.
- 89 to 94 percent admit to having at least some concern when sharing data with brands in the retail, financial services, travel and hospitality vertical markets, as well as with operators.
The findings make it clear that consumers don’t feel that their experiences have been significantly improved by the sharing of personal data. At the same time, consumers say the responsibility to keep data safe lies with enterprises, including retailers (55 percent), and mobile operators (30 percent), with regulators coming in third (15 percent). But this expectation is good news, because it empowers brands and operators to address this privacy predicament head-on.
But how can retail brands begin to tackle this complex issue of privacy? Based on our work with customers, here are two approaches we’ve seen that retailers can immediately undertake and that hold great promise:
- Strengthen mobile privacy control by ensuring customer opt-in – Since 75 percent of respondents say they don’t trust brands to take care of their data, brands must upgrade their mobile privacy control. One crucial yet fundamental part of this is establishing a rigorous process for determining proof that the customer wants to engage with your brand. The two questions that the process must address are, “What was the last known agreement in which the customer opted to receive something?” and “When was this agreement made?” Implementing an ironclad process for ensuring opt-in will go a long way in building trust and ensuring that customers don’t get surprised by any communications or services. What’s more, there are several simple methods that retailers can use to improve the likelihood of customers opting in to a campaign, including point-of-sale offers and discounts, in-app push notifications, and social media posts.
- Deliver value with a mobile loyalty reward program – With respondents saying they don’t think their mobile experiences have been improved by the sharing of personal data, brands must prove the value of customers giving consent to allow their data to be used. Loyalty reward programs offer a powerful tool for this. Although mobile reward programs have been around for several years now, their use is expected to reach a new high in the next couple of years, thanks to the rising adoption of mobile wallets and payment platforms, like Apple Pay, Samsung Pay, and Android Pay. Now that more customers are convinced to pay with their mobile devices, figuring out how to combine payments and loyalty rewards offers a more seamless process for enriching customers’ experiences with their favorite brands. In return for registering for a loyalty program and agreeing to share their mobile usage data as part of this registration, customers can gain the opportunity to receive gifts, discounts and other enticing rewards.
As the study reveals, it’s time to take consumer privacy concerns seriously. With the opportunities for the use of mobile data set to explode in the next few years, brands must achieve the right balance in the value exchange between consumers allowing personal information to be shared and gaining an enriched experience in return. Ultimately, a more transparent approach to personalization is required that puts the user in the driver’s seat and makes privacy paramount.