Rule #1 of location analytics in retail – don’t be creepy
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
RSR’s first benchmark on location analytics in retail, published in January, showed retailers perceiving that consumers have grown impatient with an old-fashioned and impersonal physical shopping experience, and that is driving them to consider location-based intelligence to delivery a highly targeted value proposition to consumers.
Not so surprisingly, over-performers (“Retail Winners”, in RSR’s parlance) favored using anonymous location tracking data for a variety of operational decisions, more than their average and under-performing counterparts.
But we were definitely surprised retailers seemed more excited about using non-anonymous data generated by consumer mobile devices to target one-to-one value offers.
We were surprised again by retailers’ responses when asked the following: “Cellular network providers are working with data providers to establish a customer’s identity and other data and provide it to retailers — what’s your opinion about using that data?” Forty-one percent agreed it’s “a great idea!”
Why is that an issue?
Back in 2014, Forbes posted an opinion piece by Danielle Citron, a law professor teaching at the University of Maryland Carey School of Law, entitled “BEWARE: The Dangers Of Location Data.” In the piece, Ms. Citron explained, “Geolocation data tells us intimate, revealing details about people’s lives — their visits to drug treatment clinics, psychiatrists, prospective employers, and more. … It is subject to serious abuse, from domestic abuse and stalking to theft and discrimination.”
With many consumers likely not having since taken the professor’s advice and turned off their mobile devices’ default always-on location-based service capability, that pushes the onus to be scrupulous back on companies that collect, analyze, and use the data.
And that’s why we expressed a strong concern in the report about retailers’ naiveté. Only 53 percent of the biggest retailers think that consumers will be concerned that they might be tracked, and smaller retailers were much less concerned.
Because of this finding, RSR recommended that retailers painstakingly explain the risks around tracking technologies to help consumers decide if they want to opt in or out of any kind of tracking technologies. The report concluded, “What seems to be okay today may not be acceptable tomorrow. Err on the side of caution, and disclose, disclose, disclose.”
- Location Analytics In Retail: Don’t Be ‘Creepy’ – RSR Research
- Location Analytics: New Data, New Opportunities – RSR Research
- BEWARE: The Dangers Of Location Data – Forbes
DISCUSSION QUESTIONS: Are you as enthused about the potential of non-anonymous location tracking to support personalized offers as retailers in the survey seem to be? How does the “creepiness factor” compare to Big Data and other technologies that stir up privacy concerns?