Big data trade-off – consumers happy to share data but want value in return

14 Jan 2014

Firms planning on implementing a big data and analytics strategy will need to realise that consumers will willingly share details about themselves – social, mobile, location – on the condition they receive a personalised experience in return.

According to an IBM study, the percentage of consumers willing to share their current location via GPS with retailers nearly doubled year-over-year to 36pc.

Thirty-eight per cent of consumers would provide their mobile number for the purpose of receiving text messages and 32pc would share their social handles with retailers. 

“Today’s consumer has been conditioned by multiple industries – from healthcare to travel – to expect personalised interactions across different channels,” said Jill Puleri, IBM Retail Global Industry leader.

“IBM’s study shows consumers are willing to share details about themselves, particularly if they receive a personalised experience in return. It’s imperative that retailers enact a big data and analytics strategy that ensures they use consumer information wisely, gaining their customers’ trust and loyalty by providing value in exchange.”  

Greater expectations

The IBM study found that consumers fall into four distinct groups differentiated by their interest in and use of social, location and mobile technologies while shopping.

Nineteen per cent of consumers surveyed lag behind the majority of the population when it came to using technology to shop.

Another 40pc of shoppers use social, location and mobile technologies for information gathering, but are not likely to use them to purchase products. Twenty-nine per cent use social, location and mobile much more extensively, for everything from researching products to ordering goods. 

Twelve per cent of consumers surveyed are classified as ‘Trailblazers’, those who use these technologies across channels and base their choice of retailer on whether they make that possible.  

Trailblazers, although a small group today, are particularly interesting as they are paving the path most consumers will walk tomorrow. The IBM study anticipates that most consumers currently using technology to research and shop will only increase their usage. Trailblazers also represent a desirable demographic.

They have a higher income level, are more optimistic about the future, plan to spend more in 2014 and are very socially engaged. IBM recommends retailers serve Trailblazers to stay competitive.  

Consumers are increasingly shopping online. In 2013, 84pc of shoppers surveyed by IBM chose the store to make their last non-grocery purchase. This year, that figure dropped to 72pc.

Surprisingly, “showrooming” – the practice of browsing goods at a store, but ultimately buying them online – is not behind this online growth.

While more respondents showroomed this year (8pc vs 6pc last year), only about 30pc of all online purchases actually resulted from showrooming – a drop from nearly 50pc last year.

Seventy per cent of online purchases were made by shoppers that went directly to the web.

Adrift in big data image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years