Should we expect a privacy backlash following personalised loyalty schemes

In Loyalty & CRM by Oliver Arscott

customer loyalty, analytics, rewards, shopping experience

Picture the scene. You enter your local supermarket. A facial-recognition camera positioned by the entrance spots you and instantly lets the system know that you have entered the store. This is confirmed by the GPS signal firing from your phone. The system meanwhile is running analysis of everything you have bought over years that you have shopped there, constantly looking for themes.

It assesses what you buy when it's hot, when it's a Friday, when you've just left work. It runs checks on other purchases you have made elsewhere, analysing what people tend to buy when they've just booked a holiday, for example. This takes just an instant and results in a series of personalised, optimised offers and suggestions which are sent either straight to your phone as you walk through the relevant part of the store, or alternatively to offer display boards which change as you walk past them.

It sounds like something straight out of a far-fetched 1970s sci-fi series, however the reality is that this and more will be coming to a shop near you very soon. Data analytics means that businesses are able to make better, faster decisions about how best to keep us loyalty and, ultimately, to squeeze more money out of us.

So what are the repercussions to this? Well as I said in my last post, Millennials in particular are keen to see a personalised experience, and if that comes at the cost of a bit of ‘invasion of privacy' then so be it. Generation X however seem to be more reticent. There seems to be real concern that letting companies delve into your data in search of actionable information could be the start of a slippery slope towards the entire collapse of the morality of privacy and also a dramatic rise in identity theft.

There is also concern about a lack of accuracy of some of the analytics, particularly technology that is only newly being developed. Inaccurate offers sent straight to a personal device would at best be annoying and at worse would drive shoppers away from previously loved stores.

What can we expect from high-end loyalty programmes then? I think it is inevitable that this technology will start to feature in shops, as well as online. Equally though I think that businesses will go through extremely stringent testing stages before anything is implemented, exactly because of the concerns above. Loyalty is changing, but audiences need to be made to understand why those changes are for the good of everyone involved.

For more information about how businesses need to engage with their customers in real time, check out this interview with David Meerman Scott.