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Consumers Willing to Trade Privacy for a Price?

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In the wake of the data breach at Target over the holidays, media outlets rushed forward to caution customers about giving out personal information at the cash register. Offering zip codes, phone numbers, and other information can create a massive log of information, stored conveniently alongside credit card information.

But despite consumer concerns about privacy, a recent study from IBM shows that many customers are willing to share information about themselves in exchange for freebies, coupons, and discounts. The research, released by IBM at an annual retailers' convention, revealed that the number of consumers willing to share current location information with retailers has nearly doubled since last year. While the majority of consumers may still prioritize privacy, IBM found that 36 percent of respondents would willingly share their location data, 38 percent would share mobile numbers for text messaging, and 32 percent would hand over their social media identities.

Data Analytics Growing

As retailers become more comfortable with extracting and studying data on customers, the response from the consumer market has been surprisingly positive. Major companies like Amazon are using retargeting to study a customer's interests and deliver specifically targeted advertisements and marketing messages. Through the use of tools like autoresponders and cookies, businesses of all sizes are able to employ this same technology with their own site visitors and in-store customers.
Instead of railing against this practice, however, customers actually report they prefer it. A survey from the Digital Advertising Alliance (DAA) found that almost 70 percent of consumers said they'd like at least some ads tailored to their interests. Only 16 percent prefer generic ads.

The trend toward personalized marketing is likely driven in part by the advancement of big data. Businesses, aware of the tools now available to them, are seeing the value in employing this data. For this reason, a larger segment of the corporate world is now using this data to drive their ad campaigns, leading customers to begin to expect personalized marketing.

A Minimum Price

There are several factors that come into play when businesses are striving to collect data from customers. For online businesses, collecting such information as e-mail addresses, street addresses, and phone numbers is part of the ordering process. But for bricks-and-mortar retailers, data collection is much more of a challenge.

By requesting zip codes or phone numbers from customers, traditional businesses have been able to track and retarget individual customers, just as their online counterparts have been doing for years. But the data breach at Target set off alarm bells, primarily because it was targeted at the POS systems themselves. Story after story cautioned shoppers against providing information at checkout, since this information could then be passed on to hackers who might intercept the information being keyed into the register.

When it comes to personalized marketing, online retailers are at an advantage. These retailers can more easily collect e-mail addresses and location information from paying customers. Even shoppers who browse a site without buying anything provide information about their location. For bricks-and-mortar retailers, the only way to retarget is to get to know in-store customers personally, which can be challenging for businesses that service a large number of people each day.

Image credit: blog.howto.gov (public domain)

 
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