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    Exploring Personalization vs. Privacy Infringement

    For consumers, trust is key

    By John Karolefski

    Cyber attacks on such big retailers as Target, Home Depot and Neiman Marcus have unnerved shoppers. Grocery stores have not escaped data breaches either. There were two attacks on Supervalu a year ago. The first involved customer and payment card information from some Cub Foods, Farm Fresh and Shop ‘n Save stores; the second involved only payment card data.

    Obviously, any data breach involving shoppers’ credit and debit card information is extremely personal. It makes them leery about sharing personal information of any kind with retailers.   

    So it’s no surprise that a new study has found that consumers around the world are strongly negative about the privacy initiatives of retailers. What is driving this attitude is concern about data security, plus what they feel is intrusive behavior by retailers.

    The study from Capgemini Consulting suggests that retailers need to balance personalization and privacy infringement. Consumers are concerned and dubious about both. For retailers, this issue involves what shoppers perceive as intrusive loyalty programs, excessive promotional mail, and confusing opt-in/opt-out instructions for these programs. Shoppers are also highly suspicious of other intrusive technology such as in-store traffic monitoring (84 percent negative) and facial recognition (81 percent negative).

    Obviously, data privacy in an era of data breaches should be a top priority of all retailers regardless of size. Smaller retailing companies may not have sophisticated systems to collect and handle shopper data, but they have less data to deal with compared to large chains. The latter may have better systems, but they are the targets of cyber attacks, not small retailing companies.    

    What to do? I reached out to a Capgemini executive to get his advice for retailers.   

    “Each retailer has to find that fine line between privacy and personalization because when you cross it, people get turned off pretty quickly,” said Dan Albright, SVP of North America Consumer Package Goods, Retail, and Distribution Practice Leader.

    Here are the action steps that Albright recommends for grocery retailers: 

    • 1. Hold online or in-person focus groups to find that fine line, and determine what level of data shoppers are willing to give.
    • 2. Determine what level of value customers want based on the personal data they give.
    • 3. When asking for personal data, tell shoppers what it will be used for and explain the security apparatus to maintain and secure that data.

    The goal is to develop a high level of trust.                                              

    By John Karolefski
    • About John Karolefski John Karolefski is a veteran business journalist with 25 years of experience covering CPG, retail and technology. Over the years, he has edited several trade publications and is the co-author of three books: "TARGET 2000: the Rising Tide of TechnoMarketing," "All about Sampling and Demonstrations," and "Consumer-Centric Category Management." He has appeared on CNN, CBS Radio and BBC Radio to discuss marketing issues. He can be reached at [email protected]

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