The golden age of data
Brands and marketers are currently in a “golden age” with more data on their customers and their shopping behaviours than ever before. But with great opportunity, there’s also great risk, as the World Retail Congress heard in Rome recently.
Presenting at the event in early September, David Johnson, COO of data-driven marketing and loyalty analytics company, Aimia, said that brands and marketers now have more data on their best customers than they could have ever dreamed of having. But questions remain about how that data is being utilised.
“We have more data and we have more channels with which to reach customers than we have ever had – and yet we’re not quite getting it right,” Johnson said.
Johnson’s comments were off the back of Aimia’s latest Global Loyalty Lens report, released at the World Retail Congress. The study surveyed more than 20,000 consumers across 11 countries, including Australia, and found that while consumers are open to providing their personal details to brands, they believe retailers aren’t holding up their end of the deal. Here are Inside Retail Weekly’s five key take-aways from Aimia’s report.
#1. Current reward programs failing to fire globally
According to the Global Loyalty Lens report, eight in 10 consumers are willing to disclose key pieces of personal information, such as their name, email address, and nationality, in order to receive better offers and reward, while 70 per cent are prepared to give additional information such as their hobbies and occupation.
Yet, according to the study, consumers believe businesses and brands are failing to deliver on this exchange, with only eight per cent globally, and nine per cent in Australia, satisfied with the offers they are receiving as a result of sharing their personal details. “When you think about the money that is being spent, we clearly have a long way to go,” Johnson said.
#2.Consumers conscious of their data’s value
The report also revealed that shoppers, including Australians, are becoming increasingly aware of the power their data holds. 68 per cent of respondents ranked their data as ‘valuable’, and 31 per cent ranked it as ‘highly valuable’. Locally, Australians seem to place higher value on their personal information compared to the global average, with 33 per cent classifying their data to be ‘highly valuable’.
“Consumers are increasingly aware that they’re sharing their data with us, and they’re increasingly aware that their data has value,” Johnson said. “Consumers are more tuned in and more savvy to what they share and who they share it with, because they care about what they’re going to get back.”
#3.Millennials and Gen Z – more willing to share
In the US, 62 per cent of millennials and Gen Z are happy to share personal information with companies, the same figure for Australia. However, 44 per cent per cent of millennials are likely to permanently disengage with a brand if they feel they are getting generic impersonal communications. Johnson, who points to the travel sector as one of the industry leaders in the loyalty space, said brands now need to go beyond just rewarding customer transactions.
“I think the travel industry does a reasonable job segmenting their user base,” he said. “Rewarding people who spend more money with the airline and making it very clear that they’re treated differently for doing so. They could do a greater job, but it points to some of the directions that retail could go.”
Shoppers are also increasingly willing to share on a broader range of devices. As Johnson explained, “A year ago, 70 per cent of US consumers would not want to share data on an iPhone. That is now down to 57 per cent. This is an area where behaviour is ahead of attitude. Even though people are still slightly cautious about mobile, it makes sense for consumers to use it.
“When the first small grocery store opened, the guy that ran that shop knew his best customers by name. Scale has robbed business of the ability to behave that way. Scale robbed business of the ability to know your customer by name, and even businesses that do know you by name, still seem to treat us like a number.
“Technology is giving business the ability to act like a corner store again. Technology is giving us the ability to build one to one relationships with our best customers. If we do it, we can build long term, more profitable, relationships, but the pitfalls are pretty clear,” he said.
#4.Disruptive markets leading loyalty charge
Disruptive markets are well ahead of mature markets in terms of their understanding and adoption of the use of customer data, according to Aimia.
Consumers in the UAE (71 per cent), India (68 per cent), and Brazil (59 per cent) are the most comfortable among all markets with sharing mobile phone numbers. In ‘leader’ nations (more established loyalty markets), just 37 per cent of consumers will share their mobile phone numbers. “These markets are leapfrogging some of the traditional markets in their approaches, attitudes, and behaviours in digital marketing.”
#5. Privacy still a concern
Globally, consumers appear less concerned about their data privacy than a year ago. But despite this, Johnson said it’s still an area that needs to be top of mind. Figures indicate a year on year decline in consumers saying that they were more worried about their personal data privacy than a year ago, dropping from 48 per cent in 2014 to 42 per cent in 2015.
“You can look at this figure [42 per cent] in a number of ways,” he said. “You can say privacy concerns are going down, but I don’t think that’s the way to look at it. It is still a huge number. Privacy is still a massive issue. It’s something that everyone has to pay attention to because we can’t all get dragged down by the lowest common denominator.”
Australia in focus
Focusing on the Australian market, Aimia found that 87 per cent of Aussie respondents belong to a loyalty program, topping the global average of 85 per cent, with Australia’s most loyal to supermarkets (50 per cent), followed by banks (35 per cent), and mobile providers (24 per cent).
More than 30 per cent of Australians rate their personal information as being highly valuable, compared with 31 per cent globally, and the majority are willing to share their information with brands, yet only nine per cent of Australian consumers feel they are benefiting from this by receiving better offers and services.
Speaking to Inside Retail Weekly in Rome, Aimia’s senior VP and head of global business development, Marc Allsop, said there’s huge opportunity for retailers in Australia.
“You can look at this figure [nine per cent] and think it’s all doom and gloom,” Allsop said. “But really, there’s huge opportunity. Personalising an offer in a slightly more effective way and being more relevant is how you can start to change the game in Australia.”
In Australia, 80 per cent of consumers are most willing to share their email address; followed by their name (78 per cent); and their nationality, (73 per cent). Australians are least willing to disclose their income level, (38 per cent); online purchase history (32 per cent); and web history (20 per cent).
Generation Z are the most open to disclose information in exchange for relevant offers, while less than half of baby boomers (45 per cent) are willing. Allsop said the key is finding a balance and using technologies, such as mobile offers, or geolocation target, in a relevant way.
“Trust is key. If someone has trusted you and given you their data, but said these are the ways in which I am going to let you use it, that’s where retailers have to focus. Once you have that permission, then you can act on it. The marketer is critical in this; technology can only do so much. The other challenge with all of this is trust – the notion of the creepy line. And at some point you can cross the creepy line.”
Inside Retail Polls
Harris Scarfe has been put into administration and receivership just days after new owner Allegro Funds took effect… https://t.co/0yZVCtly6P1 day ago
The finalists for the 2020 Retailer Awards have been announced. Here's our short list of the businesses providing t… https://t.co/NeO2iBW6iF1 day ago