IDC Retail Insights Reveals Results of Annual Shopper Survey
05 May 2014
Risks in thinking that consumers "give to get" – nearly two thirds of consumers worry they don't have enough control over what retailers can know about them
FRAMINGHAM, Mass., May 5, 2014 – IDC Retail Insights today published the results of its 2013 Annual Shopper Survey in the new report, Green Lights and Bright Red Lines: Relevancy and Privacy Challenges for 2014 (Doc #RI248179). The new study presents a finer-grained assessment of consumers' disposition toward the privacy/relevancy trade-off in the more concrete terms by which consumers make their choices. The analysis also identifies green lights of opportunity, draws bright red lines around data collection issues, and offers orchestration tactics that retailers should use aggressively, with caution, or not at all depending on their shoppers' attitudes toward the privacy/relevancy trade-off. According to the survey results, and contrary to popular belief, only a minority of consumers are openly disposed to the "give to get" exchange of private information for guidance dependent on a retailer having access to such information – 14% are privacy spenders and 15% are open guidance seekers.
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"Retailers have to learn to earn the privilege of engaging consumers based on such information as activities on social networks, mobile apps, 3rd party apps, and YouTube," said Greg Girard, Program Director, Merchandise Strategies. "'Give to get' dispositions aren't simply matters of age. In addition to brands serving young adults, those that provide superior customer service, sell high-attachment products, and cater to higher income shoppers attract disproportionately larger audiences of guidance seekers and privacy spenders."
The customer stands center stage in omni-channel retail. Earning the privilege of relationships, relevance, and reciprocity with today's informed, discriminating, and willful consumers depends on meeting each one's disposition to granting rights to their private information in exchange for the opportunity to deliver differentiated value. From the customer's perspective it's a "give to get" proposition; from a retailer's it's "learn to earn". IDC Retail Insights' recent survey research and market analysis of consumers' dispositions toward "giving to get" and opportunities for "learning to earn" identified green lights and bright red lines retailers should abide. In IDC Retail Insights opinion:
- Shoppers split about equally into two groups, those who choose privacy over relevancy and those who prefer relevancy over privacy, 53% to 47%. But by nearly a two-to-one margin, 62% to 38%, more consumers believe that they do not have enough control over their privacy in the hands of the retailers they shop.
- There are financial and customer loyalty risks in following the common wisdom that your customers are the "give to get" type – disenfranchising customers who prefer privacy. IDC Retail Insights segments consumers into three "giving" types (what they will share) and four "getting" types (what they want in return).
- Omni-channel retailers attract each giving and getting type in different proportions depending on their basis of competition, not based solely on their customers' age. Among the largest twelve omni-channel retailers those differentiating on service, selling high-attachment merchandise, and attracting higher income customers disproportionately attract customers more disposed to "giving for getting". Those differentiating on value, selling commodity-like products, and attracting modest income customers disproportionately attract customers of the opposite ilk.
- Engage privacy spenders and guidance seekers in digital and mobile media with life-centric messages extended possibly to social media activities. Keep the privilege of personal engagement. Be cautious engaging privacy hoarders and stay on product promotions focused on product performance and benefits. Earn the privilege of personal engagement.
- Only about 50% of retailers have a formal governance process for managing "give to get" data, creating risks for those without such a process and the industry overall. On the positive side, about three in four consumers trust some non-retail brands, data aggregators such as Google, Microsoft, and Apple included. Behaviors associated with privacy spending and guidance seeking (e.g., using five or more connected devices or seven or more apps) are ascendant.
Creating brand and financial value by managing the "give to get" exchange of private information for the right to provide context-sensitive guidance needs to be managed within the context of the omni-channel transformation of retail: digital transformation of marketing, commerce, and merchandising, enterprise integration, and fulfillment broadly defined from product ideation to sale and delivery.
IDC Retail Insights asserts retailers that effectively manage the "give to get" exchange of privacy for the right to provide context-sensitive guidance will be successful. Common wisdom that consumers and your customers are well-disposed to the "give to get" exchange will mislead the strategy and while there are concerns about access to and use of personal data in hyper-personalized offers, opportunities do exist.
For additional information about this report or to arrange a one-on-one briefing with Greg Girard, please contact Sarah Murray at 781-378-2674 or firstname.lastname@example.org. Reports are available to qualified members of the media. For information on purchasing reports, contact email@example.com; reporters should email firstname.lastname@example.org.
About IDC Retail Insights
IDC Retail Insights assists retail businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the retail industry. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-ri.com, email email@example.com, or call 508-935-4490. Visit the IDC Retail Insights Community at http://idc-community.com/retail.
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