THE BLOG
07/31/2013 05:47 pm ET Updated Sep 30, 2013

Big Data 'Has No Clothes' -- Millennials Love It

It's a strange world and these are strange times we are living in. We witness nerdy Edward Snowden, outing and vilifying the NSA for seeking to make the world's population transparent, while at the same time making himself transparent to the entire world. And, I suspect at some level, he's been quite enjoying his sudden (transparent) notoriety, however controversial it might be.

Yet the irony of Snowden's purpose in outing the NSA is that his fellow Millennials seem to live, breathe and happily embrace transparency in everything they do, from posting every flake of cereal they ate on Facebook, or tweeting about the bug that just ran across their desk, or "I'm walking down the street now," and, of course, the height of transparency, "sexting" (which, I know is not confined to Millennials -- witness Anthony Weiner).

So, Snowden believes the NSA is invading the privacy rights of citizens, while a whole generation (his, and commercially, the most important for the retail industry), has expanded the acceptance of transparency in their lives, almost beyond limit.

Snowden's purpose and fate are beyond my pay grade, but the irony of "bad" big data ("Big Brother") according to Snowden, and "good" big data, apparently welcomed by his cohorts, did not escape me. And the discussion of big data could not be more timely. It is the buzzword of the day, almost replacing "omni-channel."

A Big Data Outing

In fact, if Snowden hadn't been in the pickle he was, stuck in Russia, he might have been just the person to deal with the so-called spying that's going on in retailing. All kinds of technology tools have been used by Amazon, Google and many other e-commerce platforms and software programs to identify, profile and track customers' shopping behavior, all intended to build a better, more customized shopping experience for those customers. And what's wrong with that? Just as the NSA says they're using the data to deter terrorist attacks (a good thing, right?), then why isn't using data to satisfy consumers' desires a good thing? And not a peep has been heard from 'e-customers' about being spied upon, (a good portion of them Millennials).

Well, what's good for e-commerce customers is apparently not good for physical stores' customers. Several new tools have been developed to track customers' behavior from the time they enter the store, through to check out. Traffic counters, video surveillance, signals from cell phones and apps are all being used in various ways to gain the same information being mined by their e-commerce competitors. Nordstrom, Macy's, The North Face, Cabela's, Family Dollar, Warby Parker, and dozens of other retailers are testing and/or using these technologies to determine how many customers enter the store, gender of the customer, how they traverse the store, dwell time in certain areas, total time in the store, repeat visits, and more.

The store can use the data to change store layouts and presentations, offer customized coupons while in the store, better manage and train associates, or even ping a loyal customer's cell phone app about a new item while the customer's within a two-mile radius of the store.

Snowden-Like "Whistle Blowers"

All a good thing, right? A win-win for both customer and retailer. Well, as has been reported across media land, apparently there have been several "Edward Snowdens" as shoppers complaining about being tracked and profiled, enough so that some retailers are questioning the use of these technologies, or at least how they should use them.

However, while these complaints are anecdotal, coming from several retailers, nobody has quantified how many among those "whistle blowers," so to speak, were of the Millennial generation. My guess is not many.

Retailers, Stand Your Ground

These technologies and the big data they can generate is a big deal, and will be more so in the future. It is the retailer's last, biggest opportunity in the value chain, the most important part of the chain, when the consumer is deciding to purchase or not. With this information, they can understand what is attracting them and why. It's another tool to probe their minds, their behavior, and their desires, so that the retailer may capitalize on it to have the right product, in the right place, at the right time, for the right price -- and all accompanied by friendly, professional associates and a great experience.

For the retailer, having this data gives them a "first down and goal to go" with the intelligence to know precisely what play will score the touchdown. So don't expect retailers to back off from perfecting this all-important final connection with consumers. And they shouldn't.

And however consumers may be put off by this, I believe they are few and they are older. Once again, the Millennials will decide how they want to be engaged, since they will comprise 30% of all retail sales by 2020. And we all know where their heads are regarding transparency. They couldn't care less about who is looking into their brains, much less at the rest of their bodies.

So, "good" big data is here to stay, and will only get more robust. In the end, it will simply mean a better customer experience and more business for the retailer who uses it properly and strategically. "Bad" big data, either the big-brother kind or the kind that is used invasively on consumers, will disappear.

Edward Snowden may be the tip of the iceberg in the battles to come about privacy. The interesting thing in all of this is the age divide between those who abhor transparency and those who believe it to be a basic human right.

As for Snowden, in my opinion, the more opaque he is, the better, maybe in Siberia.

About the Author
Robin Lewis is CEO of the Robin Report, a retail strategy newsletter, and co-author of The New Rules of Retail (Palgrave Macmillan). He has over forty years of strategic operating and consulting experience in the retail and related consumer products industries. He has held executive positions at DuPont, VF Corporation, Women's Wear Daily (WWD), and Goldman Sachs, among others, and has consulted for dozens of retail, consumer products and other companies. In addition to his role as CEO and Editorial Director of the Robin Report, he is a professor at the Graduate School of Professional Studies at The Fashion Institute of Technology.