We are living in the era of data-driven retail where an improved shopping experience results in greater sales, stronger brand advocacy and higher regular & repeat visits. But to provide this improved shopping experience, retailers require lots of personal data to understand who their customers are and what they want.
According to IBM Marketing Cloud, there is more than 2.5 quintillion bytes of data created every day. Whilst retailers are fast to jump on the data bandwagon, using personal data to deliver marketing campaigns and experiences that better engage and retain customers, data protection is not always front-of-mind.
Image Source : cloudgenerators.com
As a result, the General Data Protection Regulation (GDPR) goes into effect on 25th May 2018, and it applies to any businesses that deal with personal data of EU individuals. Not sure what GDPR is? Refer back to our blog article Knexus Platform Achieves GDPR Compliance In Latest Release.
Implications Of GDPR For Retailers
Retailers will find GDPR particularly challenging. For the personal data which retailers have spent years in collecting to provide seamless shopping experiences for customers (both in-store and online), they now have to retrospectively assure their methods meet the new standards.
Here are the key GDPR issues for retailers:
- Under GDPR, a customer’s consent must be sought and freely given before data can be collected, processed or stored. Customers must be fully informed about how their data collected online and in-store will be used.
- Retailers use personal data to profile customers in different ways e.g. customer loyalty program and online behavioural advertising. Under GDPR, a new definition of profiling is introduced and retailers must ensure they are aware and comply with the changes in requirements.
- Retailers have an obligation to erase personal data when customers exercise their ‘right to be forgotten’ and opt out or stop their data from being stored or used.
- GDPR gives specific recognition to the concept of ‘Privacy by Design’ and also introduces a new standard ‘Privacy by Default’. Retailers are required to conduct Privacy Impact Assessment (PIA) whenever their activities may result in high risk to an individual’s rights.
It’s Not All Bad - GDPR Can Also Benefit Retailers
GDPR isn’t just rules and headaches. It’s a huge opportunity for retailers to turn data into gold.
1. Data Transparency Builds Customer Trust
As customers are increasingly aware of their individual rights to personal information, brands who are able to demonstrate that they care about how personal data is collected and stored, and how they are making this central to their customer experience, can gain enormous customer trust.
In the recent Retail Business Technology Expo (RBTE) 2018 interview, Camilla Tress, eCommerce strategist at Oliver Bonas says, “If GDPR is explained properly to customers then you hope that will provide more trust in what you are doing and it will work in our favour eventually.”
2. Highly Relevant & Personalized Experiences Improve Sales
With GDPR, customers now have more possibilities to decide what personal data they want to share, and what information they want to received. As a result, customers are now expecting ever greater relevance and personalization.
The Cisco Customer Experience Report shows that 58% of consumers were willing to share personal data with their retailer in exchanged for more personalized recommendations on future purchases. Retailers who can use this personal data in a smart way to deliver a truly relevant, personalized experience to their customers will succeed.
Camilla Tress at Oliver Bonas continues in the RBTE 2018 interview, “There will be a bump in the road. A lot of people are quite scared about losing lots of their database and their potential to market. But ultimately it will mean we have to work harder to make sure we are providing customers with what they really want.”
Image Source : oliverbonas.com
3. Cleaner data leads to greater results in sales and marketing activities
According to an article in Fresh Business Thinking, 60-80% of data that organizations (including retailers) are storing is redundant and trivial. GDPR is a great opportunity for retailers to make sure their customer database contains an audience that is genuinely invested in the brands and services.
When this data, which is in good shape and complies with GDPR, is used for sales and marketing activities, that will lead to improved results.
How Knexus helps retailers to deliver highly relevant experiences in the age of GDPR
Knexus is an AI decision making engine that optimizes customer journeys in real time to improve conversion, retention and sales. The platform matches customer data with social/marketing content, delivering highly relevant experiences that smooth the path to decision making for customers.