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Balancing Consumer Privacy With Personalized Offers

  • Written by  Ofer Tziperman, Anagog

0aaaOfer Tziperman AnagogThere’s no doubt consumers traditionally are willing to part with personal data for great deals on Black Friday and Cyber Monday. And in 2018, this trend continued. Adobe, which tracks online sales, says consumers spent $7.9B in online sales on Cyber Monday 2018; of those, $2.2B of the purchases were made through smartphones. This marks the highest U.S. e-Commerce sales day to date.

Also worth noting in Adobe’s findings was that mobile accounted for 54.3% of visits to retail sites, an increase of 32.1% in smartphone visits of the last year. However, retailers may need a little extra help to reach these customers in 2019 and are looking to artificial intelligence solutions for assistance.

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Artificial intelligence solutions — which are very good at helping pull personal data — also can be used for data privacy, keeping data stored on mobile phones, while still providing retailers and consumers with the great offers needed to extend winning sales streaks into 2019.Sales conducted via smartphones are expected to climb even more this year, affording retailers an opportunity to customize their marketing to mobile buyers.

Good news aside, data breaches, hackers and customer privacy regulations like the European Union’s General Data Protection Regulation (GDPR) will put retailers to the test this year. According to the Identity Theft Resource Center, the first half of 2018 saw more than 22 million consumer records exposed.

Many retailers face an uphill battle in marketing to mobile shoppers, as many consumers are wary of giving up their Personally Identifiable Information (PII), even in exchange for better deals. According to the National Retail Federation, retailers are seeking approaches to compliance that meet the requirements of GDPR without compromising their ability to provide customers with the personalization, omnichannel experiences and seamless retail operations they expect.

It's a big issue for large retailers. According to data collected by Euromonitor, larger retailers will likely feel more of an impact than luxury brands due to their size and practices of using customers’ personal data to grow sales. Businesses must review how data is collected, where it's stored and how it's processed. They also must determine whether they can get the same value out of information once it's anonymized to comply with GDPR and U.S. state regulations, such as the one recently passed in California, the California Consumer Privacy Act.

It will be even more difficult for retail advertisers that rely on purchasing mobile carriers’ location-based data. Both AT&T and T-Mobile announced they will stop selling mobile location data to data warehouses in March.

It’s not just the carriers that want an end to this practice. Apple’s CEO Tim Cook is calling on U.S. legislators to give consumers control of their own data and stop organizations like Facebook and Google from selling consumer data to questionable third-party marketers. Fifteen Democratic senators introduced a GDPR-like bill to better protect U.S. consumers, which will be heard and potentially voted on in 2019.

So what can retailers do to gain valuable insight into consumer shopping practices without stepping on consumers’ privacy rights? The emergence of Edge-AI technology allows moving many of the backend profiling AI capabilities to the handset itself. Accordingly, it is now finally possible to allow the phone itself to create an accurate and rich offline profile of its owner, without sharing any data outside of the phone. This is possible by smart interpretation and fusion of the signals generated by the on-handset multiple sensors, such as WiFi, Bluetooth, Barometer, Accelerometer, GPS and more.

This new offline 360-degree understanding of the user is a great new accurate targeting method as well as a complementary contribution to the existing 360 degrees of online profiling. Furthermore, it offers greater benefits to privacy protection.

Not surprisingly, an independent survey conducted by Survey Monkey for Anagog indicated that 70% of consumers say they prefer to keep valuable personal information on their mobile devices.

Both online and in-store, consumers will likely see the emergence of new retail advertising models that allow businesses to draw on loyalty program information and target marketing campaigns without conceding data privacy regulations.

Retailers that can provide a balance of protecting personal data while providing targeted retail offers will be the clear winners through 2019 and beyond. Billions of dollars are at stake and retailers, the advertising industry, and marketers must find a work-around to traditional sales and marketing tactics, in order to give consumers personalized deals, drive sales and safeguard consumer privacy. Edge-AI is one of the solutions they should consider.


 

Ofer Tziperman is CEO of Anagog. With 25 years’ experience as entrepreneur and leader of high tech private and public companies, Tziperman leverages his technology and management experience to drive Anagog’s long term success. Prior to Anagog, Tziperman served as the CEO of OTI, a leading developer of NFC-based payment solutions and as the CEO of Parx, a provider of on-street parking payment solutions. In 2001 the World Economic Forum awarded him in Davos as ‘Technology Pioneer.’

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