Figure 1. - Willingness to share personal data with different types of organizations. (Source: The Consumer Data Give and Take report)

 Data is at the core of your store transformation, and it hinges on trust

Data is increasingly becoming the lifeblood of modern grocery retailing. That’s why many retailers are making significant investments in data analytics to provide meaningful, timely insights into broad consumer preferences and habits to help manage product ranges and optimize supply chains. Using data analytics insights, they’re also unearthing actionable triggers for tailored marketing, personalisation and loyalty initiatives that increase basket sizes and store/brand preference.

Grocers, in particular, possess a significant amount of consumer personal data, given the large role they play in consumers’ daily lives—and the share of household expenditure they capture. A myriad of key personal insights can be learned from grocery data, ranging from household size, composition and wealth to lifestyle habits, dietary behaviour and general health.

A recent report, The Consumer Data Give and Take, followed a major mid-2020 European survey of 15,000 individuals across 15 countries sponsored by Ahold Delhaize. The survey explored consumer beliefs about the trustworthiness of grocers (relative to other public and private service providers) and consumers’ willingness to share certain types of data.

By and large, the research suggests (Figure 1) that European consumers regard grocers as trustworthy data guardians.

Figure 1. - Willingness to share personal data with different types of organizations. (Source: The Consumer Data Give and Take report)

Consumers were specifically asked about their attitudes regarding sharing 18 different data types—including banking, health and social media - with a rating scale of “Not at all willing” to “Very willing” (Figure 2). While they all agreed to share each of the 18 data types investigated it varied across age groups, with younger consumers and those with higher Ecommerce experience being more relaxed about sharing data.

Unsurprisingly, consumers showed a higher willingness to share data that would enable grocers to better personalize offerings, specials and promotions than data like financial information and social media profiles.

Figure 2 – Willingness to share different types of data. (Source: The Consumer Data Give and Take report)

Some consumers also showed a willingness to share some of their detailed health information (such as allergies, blood pressure, cholesterol, and heart rate), which suggests that these consumers see grocers as a source to help them make wiser product choices to enable healthier lifestyles and diets—and achieve greater wellbeing.

On the other hand, reluctance to share social media data suggests consumers are wary of engaging with grocers in non-traditional ways or supplying data about activities consumers see as having no connection to grocery shopping. Although, with the rise of social commerce their willingness to see promotions and offers in their feeds is changing.

Most interesting are the clear signs from the survey that consumers are open to considering sharing very personal information, including DNA and financial data, with grocers in the right circumstances. So while they don’t necessarily want to interact with grocers in their social media channels, it’s not because they aren’t willing to “get personal” so to speak.

This points to several interesting opportunities, such as using financial data to improve the ‘stratification’ of segmentation models, as well as to cross-sell non-grocery products (such as insurance, credit cards, energy and telco products) and using DNA data to position health and pharmacy services.

Survey respondents made it clear, however, that they have high expectations about how grocers should handle their data (Figure 3).

Figure 3 – Consumers’ criteria for sharing data with grocers. (Source: The Consumer Data Give and Take report)

 Trust is key, but it must be earned

Although this research was limited to European consumers, the insights from the report are broadly applicable to other grocery markets. In particular, the key takeaway that most consumers (with limited exceptions) don’t have any “hard no’s” when it comes to being asked to share different types of non-traditional personal data with grocers is likely to be the case for many grocers—regardless of their location.

While younger respondents with high Ecommerce adoption showed more willingness to share their information, a more nuanced read is that people are more agreeable about sharing their personal data when it’s clear how doing so benefits them.

Consumers who do a lot of Ecommerce shopping (including online grocery shopping) have experienced the surprise and delight that comes when a brand can correctly connect one or more data points together to present them with the right product recommendation at the right time and wrap it up with the right promotion or call-to-action.

These consumers have become accustomed to expecting that the more a brand learns about them, the better, more personalized and more seamless the purchase experience becomes.

But it’s also clear, based on the survey, that there are still multiple hurdles in the way for grocers to gain and use data on a mass market level that could make a tremendous difference to their business. And the key to achieving that is earning consumer trust, especially when it comes to the non-traditional data requests. That in turn requires transparency not just with respect to what data is being collected, but also in demonstrating how its collection benefits consumers.

Below is an outline of a 4-step framework for earning consumers’ trust and increasing their willingness to share non-traditional personal data (Figure 4).

Figure 4 – A 4-step framework for earning consumer trust and willingness to engage with emerging, data-driven grocery experiences.

 Step 1 – Lean into transparency

Consumers will not share data with organisations they do not trust. Trust is earned by consistently demonstrating competency, sincerity and openness.

While grocery websites and apps typically publish privacy policies that must be acknowledged as part of the sign-up process, very few consumers spend much time reading them (if at all) or considering their consequences if the privacy policies are violated. This represents an opportunity to reset customer expectations.

Data stewardship, security and privacy are rapidly emerging as newsworthy issues, on the back of growing numbers of data breaches globally. And governments stay busy investigating anti-trust and competition issues while major technology companies, like Google and Apple, wrestle to capture the mantle of “consumer privacy champion.”

Grocers have a brief window within which to get ahead of changing consumer expectations to develop, publish and promote new policies demonstrating their transparent approach to customer data protection, security and privacy.

Survey respondents made it clear they have certain threshold data security and stewardship expectations; specifically, that they’re empowered to select (opt-in) what data is captured, that there is transparency regarding the granularity of the data collected, and that it will only be shared with third parties with their express consent.

Apple recently implemented a new privacy policy that requires all iOS app publishers to specify in clear, plain language, using standardized data categories and labels, the types and extent of data collected, who collects it, and how that data is used.

This provides a useful example for how grocers could simplify privacy and data disclosures, as well as demonstrate market-leading, trust- and customer-centric transparency.

 Step 2 – Empower consumers

Once new data protection, security, privacy and transparency policies are in place, grocers should make it easier for consumers to access, visualize, review and—when appropriate—modify or delete the data currently held about them. That will help give them a sense of autonomy and control over their personal data, which helps build trust.

That’s why major technology companies, including Amazon, Google, Apple, LinkedIn and Facebook already provide these options, as well as simple tools for opting in and out of specific types of data collection and usage. And as they become used to this type of experience, consumers will increasingly expect other service providers to capture and use their data the same way—including retailers and loyalty platforms in general.

Once these self-management tools are available, consumers should have the option to provide additional data in return for clearly articulated value-added services and other benefits.

For example, consumers could be given the option of providing allergy and other dietary information with the understanding that this will be used to better tailor product recommendations or generate alerts when unsuitable items are added to a shopping list or cart.

Similarly, consumers might be encouraged to share details of their grocery purchase frequency and overall spend, together with household composition information, to receive recommendations about how to save time and money by combining traditional grocery store trips with subscription meal kits.

Once again, having a sense of control about how their data will be used, and clear explanations of the beneficial new services it enables, will increase consumer comfort levels—and their desire to share information.

 Step 3 – Deliver new benefits

Reading between the lines, it appears a significant percentage of survey participants couldn’t envisage any benefit in sharing non-traditional personal data or in adopting new technologies, such as facial recognition, as it relates to grocery shopping.

This should come as no surprise. The pattern is consistent with the innovation adoption curve that governs the success or failure of most technologies, where only a small percentage of a given population—known as Innovator and Early Adopter consumers—are prepared to engage with emerging technologies.

More resistant consumer segments, including the Early Majority and Late Majority who represent the ‘mass market’ (68 percent of consumers), wait until they see clear benefits before changing behaviours to adopt new technologies.

Figure 5 – The Innovation Adoption Curve, showing the sequence in which different consumer segments will engage with emerging technologies, was popularized by Geoffery Moore’s book, Crossing the Chasm.

The survey revealed that 19 percent of respondents were somewhat or very willing to participate in in-store experiences that relied on facial recognition using cameras while 21 percent were neutral to the idea (neither willing nor unwilling).

Similarly, 16 percent of survey participants indicated a willingness to share DNA profile information and 20 percent indicated they were neutral to the idea.

These willing consumers in both examples represent the Innovator and Early Adopter consumer segments who have a bias towards exploring the possibilities of new technologies. They play a critical role in sparking adoption by those “neutral” consumers (in the Early Majority segment) who currently are either not persuaded by any perceived benefits, or put off by perceived risks, in sharing those data types.

Innovator and Early Adopter consumers help spark mass market adoption of new technologies by demonstrating real-world benefits and making word-of-mouth recommendations to family, friends and peers within their social circle(s). This ‘social proof’ influences the Early Majority segment to seek out these benefits for themselves, thereby providing a firm beachhead for achieving critical adoption and usage milestones.

These Innovator and Early Adopter consumers should be the target of pilot trials of new grocery experiences (in-store or online) enabled by new data types or technologies. Given the limited audience of these pilots, their primary objective should be demonstrating customer acceptance and value rather than commercial return.

Showing how participating in these new types of data sharing arrangements lead to enhanced customer experiences is key to validating both consumer demand and consumer perceptions of benefit and value. They in turn provide the social ‘proof points’ required to allay the concerns of the Early Majority in giving these new technologies a try.

 Step 4 – Allow consumers to lead

Once consumer value and benefit have been demonstrated through pilot programs engaging with Innovator and Early Adopter consumers, the ‘mass market’ consumer segments (Early Majority and Late Majority) can be encouraged to adopt new behaviours and technology-enabled services. That will go a long way in creating the scale necessary to achieve solid commercial returns, through enhanced store efficiency, self-checkout productivity, improved personalization and customer retention, and new revenue-generating service offerings.

Consistent with published data and transparency policies, these Early & Late Majority consumers (representing 64 percent of the population) can be led through the process to opt-into new services and experiences using carefully designed, simplified customer journeys that demonstrate and reiterate the proof-points captured during the pilot period. Pilot participants can be encouraged to promote the benefit and ease of participation to their friends, family and social networks.

Just as important, as these new services attract new consumers, the disclosure statements, data visualisation and other consumer-facing self-education, data management and contribution tools should be enhanced to achieve peace of mind and ensure consumer trust is maintained.

 The benefits of data sharing are just beginning

Consumer willingness to share the types of data required to enable new, seamless in-store and online experiences is at the beginning stages. But if grocers read their customers correctly and provide the right combination of policies, tools and benefits, a world of new opportunities could potentially open up for them. That includes biometrics like facial recognition for ‘grab and go’ shopping, social data for personalized social commerce, and health and DNA data to enable precise product recommendations to support allergy, wellness and dietary objectives as well as new sources of revenue like health-, diet- and lifestyle-oriented subscriptions.

Grocers are encouraged to adopt structured, well-timed initiatives to demonstrate their willingness to earn consumers’ trust as data stewards of expanded data types before aiming to pilot and then scale new customer experiences and product/service offerings that these new data types potentially enable.