Turns out, you are starting to let your guard down when it comes to sharing your personal data with retailers. Maybe the discounts are too great to resist, or perhaps you’ve come to accept that the information retailers collect is anonymized and fairly harmless. It could be the fact that you’ve already adapted in other ways -– whether it’s using your mobile device to pinpoint your location on a map or simply making a restaurant reservation. Regardless of the reason, people are more willing than ever to disclose personal information to their favorite brands, and consumers are reaping the benefits.
In a recent IBM study of more than 30,000 people, 36 percent said they are willing to share their physical location with retailers, which is up nearly twofold over last year. Thirty-two percent said they would share their social media handles, and 22 percent would give out their mobile phone numbers so that they could receive text messages from merchants.
Leyou, which sells products for mothers and their children, was an Internet pioneer in China when it debuted 15 years ago. To find out what individual customers were buying, Leyou adopted a big data and analytics system. Now, Leyou not only knows what its customers have bought, but what they are likely to buy next. Leyou has expanded its presence in China to include online shopping via mobile devices and, at the same time, operates 400 brick-and-mortar stores.
The benefits of sharing your information aren’t always clear. You’ve likely been asked for your zip code when checking out at a store. Maybe you asked how it would be used and got a response along the lines of, “Not sure, but we’ve been told to collect it.” When the value to the consumer is not clear, there’s little incentive to participate. In this era of transparency, retailers need to be up-front with consumers as to what they’re doing with their data.
It’s clear that consumers and marketers alike are ready for a change. Just look at the direct marketing numbers in America last year. Companies spent $170 billion on delivering unsolicited electronic and physical junk mail that converted to sales just one-tenth and three percent of the time, respectively. That means about $165 billion was spent aggravating us, filling up landfills and cluttering spam filters -- instead of making sales.
Recognizing this, scientists at IBM Research are helping businesses understand their customers in entirely new ways by using terabytes of public social media data. They are able to generate deep profiles from vast amounts of noisy social media data and do so automatically, and reliably. This is data that marketers never had before, permitting much more refined marketing than traditional approaches based on demographics and purchase history alone.
Ultimately, the information you share is up to you. When you walk in to a store, you can choose to opt-in and alert a retailer of your presence via your mobile device. Or not. If you decide to opt-in, you should demand a lot of value in return. Instead of a general coupon, you should get something personalized for you. If you don’t, you can decide whether you want to participate the next time you’re in that store.
If you want to limit the personal information that's collected by retailers, it’s always okay to ask how the information they’re asking for will be used and what benefit you’ll receive. And, if you’re not getting a benefit, you can always "unsubscribe." IBM’s study found that consumers’ willingness to share their personal information rose even higher if the resulting interactions are personalized for them. So retailers need to apply analytics to your information to better understand what you might like.
This golden age of digital commerce requires consumers to trust in their favorite retailers. It has taken some time, but it appears that consumers are granting that trust -- if they get individually tailored benefits back in return.
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