Consumers against 'intrusive' personalisation of the shopping experience, study finds

The findings, contained in a new report co-sponsored by Pinsent Masons, the law firm behind Out-Law.com, and published by fashion and retail news outlet Drapers, highlight the challenge retailers face in using technology to personalise consumers' shopping experience, two experts said.

For its multichannel report for 2015 Drapers surveyed 2,000 UK consumers and found that consumers are more likely to use laptops than desktop computers, tablets or mobile devices to browse for and purchase fashion items.

More than half of respondents (56%) said they do not browse or buy fashion on their mobiles, whilst 68% said they do not use their phones when shopping in-store. Just 15% of consumers check their phones when in-store to compare products with other retailers.

According to the study, 65% of consumers said they think it "feels intrusive" to receive mobile alters from retailers and only 3% said they like to see 'iBeacon' technology used, which is where retailers send consumers targeted offers direct to their mobile phone on the basis of their geographical location within stores.

Expert in retail data privacy Samantha Livesey of Pinsent Masons, the law firm behind Out-Law.com, said it is clear from the survey results that "in-store personalised content alerts are still not resonating with consumers", even those within the 18 – 24 age group.

"The survey also shows that customers like to set the frequency at which they receive retailer communications – generally no more than once a week – and still don't like disclosing personal data other than for functional reasons such as faster check-out for repeat purchases," Livesey said.

"When adopting a personalised approach retailers must not compromise on data privacy and security compliance. Clear and comprehensive privacy notices/policies should be used, customer informed consent obtained and robust cyber security solutions implemented. Failing to do so risks a rap on the knuckles, or worse, from the ICO plus significant reputational damage and loss of customer loyalty if a serious data misuse allegation or security breach occurs," she said.

According to the new report, nearly a quarter of consumers (24%) said that they are more likely to buy additional products they would not have thought of purchasing where retailers suggest products they might like based on data about their previous purchases.

The report also highlighted the attitude consumers have towards sharing their personal data with retailers depends on what type of data they are asked to share.

More than half of consumers are most willing to share their name, email, age and address with retailers, but fewer than 10% are prepared to share data about their personal preferences, such as hobbies, their financial status, occupation and income or social media login details, it said.

"The ultimate prize for the retailer is knowing what the customer wants and being able to put that in front of them at the exact moment they want it – whether that's in store or on the customer's tablet, laptop or mobile," Tom Leman of Pinsent Masons, a specialist in advising retailers on legal issues, said.

"Handling data correctly is not just a tick-box exercise – it's a way of staying on the right side of the customer. Customers seem willing to share information that will make their shopping experience quicker and easier, but do not want personalisation to an extent that makes them feel uncomfortable," he said.

The Drapers report found that three quarters of consumers do not use social networks for shopping, with Facebook the most popular site to shop from for consumers who do. Just 17% of consumers said they would purchase products directly through social media if a fashion retailer gave them the option to. One in 10 consumers said they were more likely to engage with a brand if a friend or family member had ‘followed’ or ‘liked’ that brand, or left a comment on a product on social media.

Intellectual property law expert Iain Connor of Pinsent Masons said that the main legal issue for retailers to be aware of when using social media is brand awareness and protection.

"Social media enables instant, global and unfettered communication," Connor said. "Some content is spontaneous, ill-considered and misjudged; some forms part of a carefully planned campaign, for example by an organised action group. Either way, retailers are opening themselves up to a potential media storm if they get it wrong or others highjack the message."

"Legal reputation management combines practical experience of trade mark, defamation, privacy, malicious falsehood, harassment and data protection law. The survey shows that there is strong engagement from a small but substantial percentage of customers who need to be looked after while at the same time kept on the right side of the law.  A retailer who engages with social media must expect criticism and it is rare that a pure legal solution will be able to deal with all of this without facing a backlash of negative criticism far worse than the original complaint," he said.