Big difference between customer views and retailers´ expectations

Creepy or cool? Not all consumers are happy about how retailers use data.
There’s a huge potential for retailers in the ongoing process of digitalization, and insightful customer analytics is perhaps the most clear cut example of the opportunities customer data brings. But customers aren’t always as positive about sharing all of the different types of personal data as retailers think they are. That’s one of many significant challenges for retailers identified in a new report by research institute HUI, commissioned by IT service provider Tieto.

Among the retailers taking part in the survey, only 10 percent believe their customers have a negative view towards sharing personal information with them. But when HUI asks a statistically representative segment of customers, nearly 4 in 10 state that they see this as a negative. Only 27 percent think it’s something good.

There’s a gap between retailers and their customers, a gap that businesses and organizations need to be aware of and take into consideration as they implement their strategies to tackle the continuing process of digitalization.

“The report is a great illustration of the challenges retailers face and a wake-up call when it comes to the processing of customers’ personal information. But it also underlines the great possibilities this area has to offer. Consumers today are a discerning group of people and retailers struggle to live up to their high expectations. Identifying what data to use and to use it in the right way is key here,” says Peter Axelsson, Head of Retail, Logistics and Services at Tieto Sweden.

Modern society is well on its way toward an estimated 100 billion connected gadgets. And in many cases, the solutions built upon this new technology will be based around personal information.

In the retail industry this means that companies are presented with great new opportunities to get to know their customers, simply by collecting and analyzing their data. Today there are many examples of how this information, shared by customers, is transformed into more personalized offers and a customized shopping experience.

Customers perhaps don’t share the overwhelming enthusiasm of retailers, based upon the way their personal information is used today, but the report shows that how they view sharing this data largely relies on how familiar they are with the way in which their information is used. Among those who claim to have good knowledge of this, 4 out of 10 are positive to sharing information with retailers. But among the majority of 67 percent who state that they don’t know what retailers do with their personal information only 24 percent have a positive view towards sharing it.

“Consumers have a much more positive view of sharing personal information when they are shopping online. There, the acceptance towards innovation and new technologies introduced to the shopping experience is much greater. One explanation is that the industry has done a much better job at demonstrating the benefits online, and making sure that there is an actual benefit to be had,” says Martin Karlsson, Senior consultant at HUI Research.

HUI states in the report that there is a boundary here, a divider for where customers either are fine with sharing their personal information or cringe at the very notion. For instance – most customers have no issues with retailers knowing their names or where they live. But nearly half state that they’re negative towards retailers having access to a record of purchases they’ve made. That also happens to be the very type of information that most retailers in the survey state that they both have access to and make regular use of.

There is a boundary between what’s cool and what’s creepy, a boundary that is neither static nor easily defined. But what it undoubtedly is, is defined by the customers. It’s up to them to draw the line, and up to the retailers to make sure they never overstep it.

Tieto Retail Outlook No.2
The report is based upon two surveys carried out by HUI during the end of last year. One with a representative selection of Swedish consumers that have answered questions about their shopping habits and their views on sharing personal information to retailers. The other survey was carried out among those very retailers in order to demonstrate how they work with personal information – and what they plan to do in this area in coming years.

Download the report:
http://pages.tieto.com/LP-GL-MRL-RetuilOutlook2016english_LP1.Downloadpage.html

For more information, please contact:
Peter Axelsson, Vice President Sales - Head of Retail, Logistics & Services Sweden Tieto Sweden AB
Mobile: +46 70 602 72 18, peter.axelsson[at]tieto.com

Tieto is the largest IT services company in the Nordics providing full lifecycle IT services. We also provide global product development services for companies in the communications and embedded technologies arena. Through industry insight, technology vision and innovative thinking, Tieto proactively strives to inspire and engage its customers in finding new ways of accelerating their business. Building on a strong Nordic heritage, Tieto combines global capabilities with local presence. Headquartered in Helsinki, Finland, Tieto has over 13 000 experts in close to 20 countries. Turnover is approximately €1.5 billion. Tieto’s shares are listed on Nasdaq in Helsinki and Stockholm. www.tieto.com