Disruptive TechFebruary 14, 2020

Wi-Fi and Privacy: The Value Exchange That Retailers Must Master

By SHAMONTIEL VAUGHN | Staff Writer‍

 

Google Maps Timeline is watching your moves. If you’re using GPS systems or shared Wi-Fi, expect Google to be calculating your city visits, your suburban visits, how many miles you walked, how many miles you drive and what stores you visited. If you think this is invasive, you’re not wrong. But if you turned on this app notification, Google Maps is not wrong.

There are some perks, including Google being able to provide restaurant recommendations and suggestions for a faster commute. Is that enough of a reason to leave this account level-setting on? For some it is, and for some, it simply is not. And this is the kind of dilemma that stores have, too, when they want extra information about location history and customer shopping preferences. How do you keep a consumer from turning their notifications off or giving your mobile apps a chance?

 

The generational gap with consumer privacy

In the Baby Boomer and Generation X world of White Pages and Yellow Pages, it’s not like information on mailing addresses and phone numbers were private. Even paying for an unlisted number still leads to suspicious calls. Religious groups still knocked on strangers’ doors. Door-to-door salesmen still popped up on the other end of peepholes. But there was still that layer of privacy when consumers’ doors were closed. No one knew who they were inside of their homes or even when they went inside a store. They could shop quietly and without the worry of being monitored.

Nowadays as soon as consumers walk into a mall, a mobile alarm sounds to ask them if they want to share the mall WiFi. Stroll into a department store such as Kohl’s, and they may get an offer to use the department store Wi-Fi instead. But when this information pops up, it very rarely tells consumers what they get out of it. So they ignore the Wi-Fi suggestions and choose to keep using their own mobile networks. Google is probably still watching them, but the stores aren’t supposed to. That is, unless the store doesn’t have some kind of deal with third-party providers that are also tracking consumers’ phones.

And that’s part of the problem, specifically for older customers who are not used to this level of digital monitoring. But for Millennials and Generation Zers, it’s a little more complicated.

“We’re stepping into a day and age where we have got to find the right balance,” said Jacob Pat, Chief Information Officer at Champion Petfoods, on the “RETHINK Retail” podcast. “If you talk to some of the millennial generation, they’re willing to sell absolutely everything they have on themselves if it can make their life better.”

But with that willingness to share consumer habits, neither group likes to be tricked into it. Haniff Brown, the founder and CEO of Fit:Match, pointed out where the line is drawn.

“Typically, our average customer today is 22 to 24 years old and she—because it’s majority women right now—has sort of grown up in an environment where there’s not a mistrust of technology, where there’s not concerns or so forth around data protection,” said Brown in an episode of the “Retail Rundown” podcast. “And so we’re getting very little friction from the Gen Z/millennial market. They’re saying, ‘Look, if I can interact with this platform for three to five minutes out of my life and you guys are going to connect me in this very unique way to brands, that’s a value exchange and I’ll sign up for it any day of the week.’”

He continued, “But the biggest takeaway for us is once there’s real perceived value exchange, issues around data and data privacy and protection, especially for that Gen Z/millennial market, really isn’t as massive versus other generations and age groups where [there] is still a larger mistrust of data and technology.”

On Fit:Match, 80–90 percent opt into the program, although the company only expected about 30 percent. This opt-in was largely due to a “value exchange”: What will this company use my stats for? Am I giving away too much information? What barriers are in place to protect my privacy?

But as Carol Spieckerman, president of Spieckerman Retail, pointed out on the same “Retail Rundown” podcast episode, some online and brick-and-mortar companies do not successfully look out for the consumer.

“I think the problem is that a lot of consumers don’t know how much privacy they’ve already sacrificed, how far things have gone beyond permission and how many decisions have already been taken out of their hands,” said Spieckerman. “One of the doggone unfair things about Amazon is it’s not just a retailer. It’s competing. It has so many other pieces in its portfolio, so many other business models and it has its tentacles extended into all kinds of things.”

But customers need to shop. Customers may appreciate the product suggestions. And who doesn’t want a good discount or money-off options for sharing their information? Consumers have to choose between bargains, product value and sharing their info to get it. So if companies already know there are privacy concerns, regardless of the value exchange they’ll get, how can they do a better job of improving the business-to-consumer relationships?

 

Overcoming data privacy concerns versus collecting consumer data 

As Brown mentioned above, the first step that retailers need to learn is how to make data collection important to the user. A bed that collects sleep data may be worth it if it can lead to less snoring and more comfort while sleeping. A security device that monitors a consumer’s home whereabouts is necessary to get a handle on residential package theft. Free store Wi-Fi may make more sense for scanning products, looking for similar items on a consumer’s wish list, checking prices and even searching for parking spots in the mall lot. Then there are the calculated points to get free items and money-off coupons.

However, the consumer should always know what they’re giving up in return. If the same company that sells anti-snoring beds gives that information to a sleep apnea medication manufacturer, the customer should know that, too. If the security device company sells a consumer’s whereabouts to restaurants so they can send unsolicited brochures in the mail, that should be known, too. If the free Wi-Fi in a mall is tracking consumers to find out which stores are getting their business more, customers should be all-in on letting each store know who is best. And the list goes on.

 

The Takeaway: Businesses need to understand their customers. It’s a waste of time and money to try to market products to a customer who is not interested. It makes more sense to fully understand the demographics that are visiting their retail websites and brick-and-mortar stores. But just as they want more information, so does the customer. If both can mutually make a deal with each other for a value exchange, consumers may be less likely to be suspicious of a retailer’s intentions. If not, there will usually be pushback.