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    The Privacy Paradox

    When do loyalty programs get too personal?

    As the grocery shopping experience becomes increasingly digital and personalized – from the launch of countless smartphone apps to loyalty programs that more narrowly target consumers’ preferences and behaviors – it seems, according to recent research from Mintel, that more than one third of shoppers are concerned about the privacy of their personal information.

    Consumers’ participation in loyalty programs continues to grow across all retail channels, but according to Mintel, the numbers don’t necessarily “translate to 'genuine' loyalty.” In addition to the 32 percent of loyalty members who are concerned about their privacy, more than one in 10 members (13 percent) express frustration or dissatisfaction with the level of personal information being requested upon enrollment, as well as a lack of control over the privacy of that information (10 percent).

    Ika Erwina, retail and technology analyst at Mintel, points to the “paradox at play between personalization and privacy,” because although “loyalty program members crave a more personalized, relevant experience, they also show concern about sharing the information required to enable the retailer to deliver on this desire."

    As further evidence of consumers’ mixed signals between their desired level of personalization and the hesitancy to provide the necessary information, some 16 percent of retailer loyalty participants believe their programs are actually not tailored closely enough to their shopping habits. This trend is particularly true of the Millennial generation (20 percent), the group most notorious for expecting a convenient and tailored shopping occasion.

    "Age is strongly related to the type of loyalty program in which people belong,” added Erwina. “… Given Millennials' strong propensity toward environmental and social responsibility, retailers may need to incorporate social issues into the program to improve awareness and participation."

    Retailers must identify the cross-section between offering their loyalty program participants maximum benefit while avoiding the “overkill” factors that might deter them. And, according to Mintel, successful programs will be based in those factors that consumers find most appealing, including the ease of redeeming rewards (55 percent); ease of earning points (51 percent); monetary rewards (51 percent); access to exclusive deals and coupons (36 percent); and easy enrollment options (22 percent).

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