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The thin line between privacy and personalization

Personalization is a key for businesses hoping to retain consumers today. However, to create a personalized experience, businesses will need to know their consumer habits. And the only way of doing that is by accessing their data.

Most businesses are already relying on data-driven analytics and insights to make business decisions in their operations. From popular products to spending habits. These data are often analyzed to understand consumer behaviors. But where do organizations draw the line on this?

While privacy advocates cite concerns on the amount of customer data being collected by organizations, most regulatory requirements allow such data to be used for insights, provided they remain within a certain geographical space, not used for other reasons, or sold to third-party organizations.

In the e-Commerce industry, retailers rely purely on data-driven insights to generate sales. Modern e-Commerce platforms and shopping applications can today predict what consumers want and make suggestions to them even before they open the app.

To understand more about personalization in e-Commerce and where retailers can draw the line when it comes to privacy, Tech Wire Asia speaks to IBM Consulting’s Charu Mahajan, Partner & Sector Leader for Consumer Goods, Retail, Travel & Transport.

Acording to Mahajan, various studies have shown that consumers like to shop on websites or with brands that know their preferences and offer personalized recommendations. This helps save the shoppers’ time and offers them the convenience of a more curated experience.


Charu Mahajan, Partner & Sector Leader for Consumer Goods, Retail, Travel & Transport, IBM Consulting

In fact, she explained that most shoppers feel the trade-off they have to make in sharing their data with retailers and websites in exchange for personalized offers, especially discounts linked to cart-recovery or auto-order based on past purchases, etc. are worth the value they bring to shoppers online experience.

“Enablement of cookies across our devices, allowing mobile / web applications to track our activities, permitting social media companies to share our online activities on their platform to third-party aggregators are allowing retailers to form very specific profiles of their consumers, which then enable re-targeting based on the consumers’ intent and past behavior.

As more and more customer profiles are getting more specific and indeed more personal – for example, retailers might know what you search for, where you live, who are your friends, when are going for a holiday – then there is always a danger of security breaches and sometimes manipulation by less ethical retailers or political parties or other actors,” added Mahajan.

Regulations and personalization

Around the world, regulations continue to evolve. Laws and requirements by governments, regulators like GDPR, and such are ensuring technology providers take data privacy seriously and do not misuse it.

For example, companies like Apple are giving back consumers the choice on what data they would like to share with retailers and what data is personal. Mahajan highlighted that data protection and security laws are making it incumbent on retailers to protect the privacy of their customers and ensure that sensitive data around individualization and financial details are stored with the highest levels of security, failing which liabilities could be huge.

“While the customers are taking control of their data, retailers also need to realize that just because personalization is possible, doesn’t mean it’s appreciated. Personalization serves to be more customer-centric and serve the customers’ interests. Relevance is critical. If the personalization is not relevant to the consumer nor making their life simpler, it is simply unpleasant,” said Mahajan.

The omnichannel retail experience

“Our IBM point of view on this is that shopping can no longer be divided into online or offline experiences. Many consumers now prefer an “all-of-the-above” approach, visiting stores, shopping online, and using mobile apps interchangeably. They want the freedom to use whatever shopping method is most convenient for them at the time,” commented Mahajan.


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For her, hybrid shopping indicates how consumers are mixing physical and digital channels to create their own shopping journeys. Some examples include buying in-store and shipping/delivering to home and buying online and picking items up in-store. This is why, just as the Covid-19 pandemic has made hybrid working the new normal, the same way, the future of shopping has become hybrid.

“As consumers slowly flock back to brick-and-mortar stores in this post-pandemic recovery phase – they would not be letting go of their mobile and digital aisles.

Omnichannel shopping experiences have spoiled us all. If consumers take the effort to go into a physical store, and they don’t have what we’re looking for, or if they must endure long checkout lines, or if an online sale item is a full price in the store, they get frustrated and may not come back. They are shopping in the store with the sales tag in one hand and their phones in the other,” added Mahajan.

As such, Mahajan believes retailers must be ready to do the same, blending their in-store, online, and on-the-go environments in daring and unexpected ways. And consumers, weary of screens and wary of certain digital giants, are ready for something new and this is the future of hybrid shopping.

Every retailer needs to be asking right now if they can do converged commerce and seamless experiences. Mahajan explained that they need to know if they can deliver on the new expectations of post-pandemic consumers? Can they do so economically, not only serving a supply chain for hundreds of stores but hundreds of thousands of shoppers – those looking for everything wherever they are? Can they do it practically – empowering employees and consumers alike with seamless data that inform offers and analytics?

For retailers who’ve already invested heavily in modernizing and digitizing their physical stores, they are well ahead in this regard, breathing new life into traditional shopping environments with modernized customer experiences. Some of the most adept even seized on the challenges of the pandemic to provide new kinds of shopping, purchasing, check-out, and returns features.

Yet, she feels this work remains in its nascent stages, particularly as consumers get comfortable with what might be called the new world of shopping.

“Just as the ways we live and do business will continue to evolve, so will retail, which is why agility for companies is so important,” she concluded.