Six Pixels of Separation - The Blog
February 15, 2013 8:38 PM

Tracking, Personalization And Screams Of Privacy

Any tracking of information of consumers without the consent of your consumer is a breach of privacy, right?

In my forthcoming business book, CTRL ALT Delete (out May 21st, 2013), I go in-depth on the notion that consumers need to better understand the difference between personalization (tracking their usage to create a better and more personalized experience) versus privacy (capturing personal information and using it in any way that has not been pre-approved by the consumer). Some privacy advocates might argue that this is a matter of simple semantics. I would argue that the best brands in the world are way less interested in procuring private information and much more interested in creating the ultimate in personalized experiences. The obvious fear is that if you give businesses an inch - in terms of individual information - they will take it a mile and suddenly be manipulative and dangerous. The truth is that marketers have failed this test so many times in the past that we must follow the legal rules set out by government and that consumer advocate groups must be vigilante with our performance. Marketers are constantly being put on notice for tactics and campaigns that cross the line. It's too bad, because this moment in history could well be the one where marketing finally delivers on its promise of being relevant, personal and near-individualized.

What's your Amazon experience like?

On February 12th, 2013, Business Insider ran a new item titled, Amazon Has The Best Reputation Of Any Company In The U.S., that stated: "Robert Fronk, EVP of Harris' Reputation Management service says in a release, 'Our results show that Amazon has managed to build an intimate relationship with the public without being perceived as intrusive.' (This sounds like a shot at other companies like Facebook.)" Amazon beat out Apple, The Walt Disney Company, Google and many more to grab this coveted spot. What's fascinating about this is what, exactly, Amazon knows and tracks about their consumers. You can answer that statement in one word: everything. Amazon tracks their consumers with such sophistication and layers that everyone's Amazon experience is fundamentally different from one another (they are that highly personalized). They're not just tracking what you looked at and/or bought, they're tracking all of your behavior and more (including the ability to tie your reading habits on a Kindle device or app to how you shop their e-commerce experience and beyond). According to the report above (and just about every person you speak to who is an Amazon consumer), we love them for it.

Why should physical stores not have the same kind of usage information that Amazon is capturing?

This is the question that some former Salesforce.com executives started asking. So, they left Salesforce and launched a new startup called, Nomi. Nomi also made the news this week when they secured over three million dollars in venture capital financing a mere two weeks after their first investor meeting (you can read more about it right here: It Took Only 13 Days For Former Salesforce Execs To Raise $3 Million For Their Startup, Nomi). What does the company do? According to the Business Insider article: "Nomi's team gives retailers a snippet of code that lets wireless routers listen for nearby smart phone signals. The wireless routers can detect unique Media Access Control (MAC) codes from smart phones and then collect non-invasive data about customers in real-time. Its founders say no personal information will be pulled; store owners won't even know shoppers' names. 'It's completely passive and completely anonymous,' co-founder Corey Capasso, 25, tells us. Instead, Nomi will show retailers how many customers visit each day, the average time spent in the store, and new versus repeat visitors."

Creepy invasion of privacy or awesome use of technology at the physical retail level?

We're going to have to figure out what is clearly a grey and fuzzy line in terms of perception when it comes to consumers. In fact, I would argue that technologies like this are no more a breach of privacy than the tracking that Amazon deploys on every consumer who clicks on to their website (whether they are signed into their own account or just browsing anonymously). This is an important distinction because on the consumer side, they are actively wanting more and more mobile information at the store level. In the Internet Retailer article titled, Smartphone owners want more mobile information in stores, from December 31st, 2012: "Smartphone owners are using their devices to help them better understand products. 30.1% of smartphone owners say they most often research products on their phones when away from home, the survey finds. 19.6% do so while watching TV, 13.4% on the weekends, 12.4% while shopping in-store, 10.9% while at work and 2.7% on holidays. 10.9% say they do not research products on their smartphones. Of shoppers who research products while in a store, 73.9% compare prices among retailers, the survey says. In-store smartphone shoppers find a variety of tools helpful. 76% say mobile coupons are helpful, 31% say apps, 26% QR codes, 20% text messages, 19% links to informational videos and 17% mobile display ads."

What does this all mean?

Both consumers and retailers are empowered like never before. The physical retail landscape is now making major adjustments to create experiences as captivating (in terms of price, speed and ease of access) as the ones consumers get online. Ultimately, data and information rules. The consumer wins when they are empowered with the information and pricing they need to make the best decision and now, retailers can have access, knowledge and power to ensure that they're delivering the best experience to their consumers based on their needs. Cumulatively, this is a tonnage more of raw data being produced and stored somewhere that can be used in a positive way... and in a negative way (if it falls into the wrong hands). What that ultimately means is that both consumers and brands are going to have to be doing a lot more in terms of education to ensure that privacy is permission-based and that personalization is always rendered in the best possible and ethical experience for the consumer.

How do you think this will all pan out?

By Mitch Joel


Comments Comments Feed
  • Posted by Jon Steiert
    Mitch Joel

    Mitch, this post popped up into my Facebook feed and I couldn't wait to read. The words that followed made me incredibly stoked for what awaits in CTRL ATL Delete. Anyway, I've been reading blogs like this for the past two days, each one getting me more and more excited about my chance to help physical locations & brick & mortar brands become immersed in the world of The Social Experience. With this coming revolution, combined with the new demand for informational selling and mobile explosion, retailers that jump onto this early will gain the same kind of notoriety that brands like Dell, Etsy, and Warby Paker have in the current social landscape. This opportunity doesn't just lead to future sales, a major selling point to brands, but the chance to increase sales in-store during visits. The vehicles through which these social experiences will continue to change but the companies that get this right will hope to win the same kind of business joys that Amazon continues to enjoy. Can't wait to explore this more when we podcast, Mitch. Thanks as always.

    Reply
  • Posted by Diane Horton
    Mitch Joel

    Mitch this is an exciting time for consumers and retailers for sure. I for one am looking forward to the time (hopefully soon) when I walk into a mall and, if i choose to, receive real time updates on sales and suggestions on items based on my shopping habits that can then cross over online. I think that's a win for consumers and retailers.

    Reply
  • Posted by Scott Offord
    Mitch Joel

    I know this is a big topic in the UK recently, with Google Analytics and SSL and the such.

    Reply
  • Posted by gin
    gin

    Well, I wish Amazon would actually bother to personalise, in my experience it is very ham-fisted. And if Amazon is the best of the personalisers, I think I'll take privacy.

    Amazon continually advertises electronic goods to me that it cannot/will not ship to my country, nor any other country I have ever lived in.

    It continually promotes shipping offers that are only available in North America, I have never lived in North America. Yes, this occurs when I am logged in and Amazon has my home address on file, but even if I weren't logged in, Amazon can see my ip address/country.

    I only browse Amazon for one type of books & those are the only type of books in my wishlist. I almost never browse Amazon for other items, yet Amazon sees fit to advertise fashion, crime novels and other "best sellers" to me in increasingly frequent/frantic emails.

    I'm not against personalisation, but wow it's really poorly done.

    Reply
  • Posted by Tom Marsh
    Mitch Joel

    Mitch, Glad to see you call out marketers (or their companies) on the abuse of the trust that comes with collecting that much personal information. We question the premise that personalization and privacy is an either or proposition. While that has been the case for technology reasons, we will be presenting a new paradigm next month. Taking advantage of some new technology we can provide the individual the ability to collect and control their digital persona(s) on their smartphone. With this on their phone they can control the level of personal information they share based on the level of service and trust they have in the other party, digital or real world. We think its a much more human approach that will tilt the scale back in the direction of the individual. Tom

    Reply
  • Posted by Kate Caldwell
    Mitch Joel

    The idea that ethics will be considered by marketers in this 'blended' retail situation rather than any other is one I'd like to see more discussion on. I'm still thinking about whether personalization is an invasion of privacy or not. Off the cuff, I agree with Tom Marsh above that it's up to the individual to decide and the tech should be flexible.

    @Tom Marsh, I'm interested in your app. I was working on something similar recently. Seems that it's appropriate for mobile to represent the person more fully rather than just being another delivery screen they're tethered to.

    Kate

    Reply
    • Posted by Tom Marsh
      Mitch Joel

      Agreed that's what I like about Mitch. He's a marketer but doesn't hesitate to call out his peers when need be. Pressure is really on us in the technology side to deliver viable alternatives that work for both the marketer and individual. Digital experiences shopping or otherwise between the parties should mirror the same collaboration of equals that we have in the real world. The project I'm mentioned will be announced around March 25th but I would be happy to chat more about it anytime, I"m @tom_semantic.

      Tom

      Reply
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