Any tracking of information of consumers without the consent of your consumer is a breach of privacy, right?
In my forthcoming business book, CTRL ALT Delete (out May 21st, 2013), I go in-depth on the notion that consumers need to better understand the difference between personalization (tracking their usage to create a better and more personalized experience) versus privacy (capturing personal information and using it in any way that has not been pre-approved by the consumer). Some privacy advocates might argue that this is a matter of simple semantics. I would argue that the best brands in the world are way less interested in procuring private information and much more interested in creating the ultimate in personalized experiences. The obvious fear is that if you give businesses an inch – in terms of individual information – they will take it a mile and suddenly be manipulative and dangerous. The truth is that marketers have failed this test so many times in the past that we must follow the legal rules set out by government and that consumer advocate groups must be vigilante with our performance. Marketers are constantly being put on notice for tactics and campaigns that cross the line. It’s too bad, because this moment in history could well be the one where marketing finally delivers on its promise of being relevant, personal and near-individualized.
What’s your Amazon experience like?
On February 12th, 2013, Business Insider ran a new item titled, Amazon Has The Best Reputation Of Any Company In The U.S., that stated: "Robert Fronk, EVP of Harris‘ Reputation Management service says in a release, ‘Our results show that Amazon has managed to build an intimate relationship with the public without being perceived as intrusive.’ (This sounds like a shot at other companies like Facebook.)" Amazon beat out Apple, The Walt Disney Company, Google and many more to grab this coveted spot. What’s fascinating about this is what, exactly, Amazon knows and tracks about their consumers. You can answer that statement in one word: everything. Amazon tracks their consumers with such sophistication and layers that everyone’s Amazon experience is fundamentally different from one another (they are that highly personalized). They’re not just tracking what you looked at and/or bought, they’re tracking all of your behavior and more (including the ability to tie your reading habits on a Kindle device or app to how you shop their e-commerce experience and beyond). According to the report above (and just about every person you speak to who is an Amazon consumer), we love them for it.
Why should physical stores not have the same kind of usage information that Amazon is capturing?
This is the question that some former Salesforce.com executives started asking. So, they left Salesforce and launched a new startup called, Nomi. Nomi also made the news this week when they secured over three million dollars in venture capital financing a mere two weeks after their first investor meeting (you can read more about it right here: It Took Only 13 Days For Former Salesforce Execs To Raise $3 Million For Their Startup, Nomi). What does the company do? According to the Business Insider article: "Nomi’s team gives retailers a snippet of code that lets wireless routers listen for nearby smart phone signals. The wireless routers can detect unique Media Access Control (MAC) codes from smart phones and then collect non-invasive data about customers in real-time. Its founders say no personal information will be pulled; store owners won’t even know shoppers’ names. ‘It’s completely passive and completely anonymous,’ co-founder Corey Capasso, 25, tells us. Instead, Nomi will show retailers how many customers visit each day, the average time spent in the store, and new versus repeat visitors."
Creepy invasion of privacy or awesome use of technology at the physical retail level?
We’re going to have to figure out what is clearly a grey and fuzzy line in terms of perception when it comes to consumers. In fact, I would argue that technologies like this are no more a breach of privacy than the tracking that Amazon deploys on every consumer who clicks on to their website (whether they are signed into their own account or just browsing anonymously). This is an important distinction because on the consumer side, they are actively wanting more and more mobile information at the store level. In the Internet Retailer article titled, Smartphone owners want more mobile information in stores, from December 31st, 2012: "Smartphone owners are using their devices to help them better understand products. 30.1% of smartphone owners say they most often research products on their phones when away from home, the survey finds. 19.6% do so while watching TV, 13.4% on the weekends, 12.4% while shopping in-store, 10.9% while at work and 2.7% on holidays. 10.9% say they do not research products on their smartphones. Of shoppers who research products while in a store, 73.9% compare prices among retailers, the survey says. In-store smartphone shoppers find a variety of tools helpful. 76% say mobile coupons are helpful, 31% say apps, 26% QR codes, 20% text messages, 19% links to informational videos and 17% mobile display ads."
What does this all mean?
Both consumers and retailers are empowered like never before. The physical retail landscape is now making major adjustments to create experiences as captivating (in terms of price, speed and ease of access) as the ones consumers get online. Ultimately, data and information rules. The consumer wins when they are empowered with the information and pricing they need to make the best decision and now, retailers can have access, knowledge and power to ensure that they’re delivering the best experience to their consumers based on their needs. Cumulatively, this is a tonnage more of raw data being produced and stored somewhere that can be used in a positive way… and in a negative way (if it falls into the wrong hands). What that ultimately means is that both consumers and brands are going to have to be doing a lot more in terms of education to ensure that privacy is permission-based and that personalization is always rendered in the best possible and ethical experience for the consumer.
How do you think this will all pan out?