What Retailers Can Learn from Personal Health Apps

Aug 06, 2014 11:08 AM  By

When people are willing to hand over data about their heart, sleep cycles, medications, diet and exercise, why can’t retailers collect data without seeming creepy?

With wearable technologies from Fitbit, Basis and Jawbone now widespread, and mobile apps like Argus, MapMyFitness and RunKeeper to soak up all the data, tech companies and advertisers now have better information about your health than your own doctors. Yet users don’t find the wearables and apps creepy. In fact, fitness and health apps are growing 87% faster than the mobile app industry as a whole, and their usage is up 62% in the last six months, according to a recent report from Flurry Analytics. Health apps are close and coveted.

In contrast, retailers who track spending habits, target coupons and provide mobile apps and WiFi beacons to track your location in their stores seem close but creepy. So why do consumers appear to have different standards for health apps and retailers? How can retailers move their data practices from “close but creepy” to “close and coveted”?

Health Apps Actually Provide Value   

As we now know, fitness and health apps collect tons of personal data and often sell it to advertisers. According to AdAge, when the Federal Trade Commission studied 12 mobile health and fitness apps this year, it found that they had distributed user app data to 76 third parties. In some cases, names and email address were being shared alongside data on exercise, diet habits, medical symptom searches, zip codes, geo-location and gender. More than a few major media outlets have reported on this data collection, yet few consumers seem deterred. Why?

The answer is that health apps can make your life better. Although these companies monetize personal data, they also help you optimize your sleep, exercise, dieting and healthcare. By tracking your health over the long-term, they show if you’re improving and they motivate you to reach your goals. Sure, if you’re training for marathons, your health app might turn you into an advertising piñata for companies that sell shoes, apparel and supplements. But, if that same app adds 5 years to your life, knocks off two minutes from your mile and helps you avoid overtraining injuries, it seems like a sweet deal.

Retailers Provide Coupons

Whereas health apps focus on helping users, retailers focus on selling more stuff. Sorry, but customers are not grateful for product recommendations, offer codes and coupons. You and I both know they are just designed to make people buy more stuff.

So when retailers collect data with the sole mission of convincing people to buy more stuff, of course customers get creeped out. Retail mobile apps, in-store WiFi beacons and online recommendation engines seem like covert methods to part people from their cash.

Health apps try to deliver value, and retail technology tries to deliver sales. Both get close, but retail gets creepy. So could retailers emulate what the health app industry is doing right?

Close and Coveted  

The task before retail is to move from “close and creepy” to “close and coveted.” The first step is to let go of the myth that customers only value deals – because they don’t. There is always someone cheaper than you. The second step is to define what is valuable to retail customers. We can summarize it in three points:

  1. Something is valuable to your customers if it enables them to improve their lives in a meaningful way. Better health, better fashion, technical knowledge, skills, awareness or a good laugh are all valuable and meaningful.
  2. Customers want value across channels, devices and platforms. Whether they visit digitally or physically, they deserve commensurate value.
  3. The value delivered must be independent of the amount or frequency of purchases. Real gratitude towards customers is segment agnostic.

So where you do collect data, and how do you use that data to deliver value in line with these criteria? Here are three simple examples:

Mobile Apps: If you’re going to use a mobile app to track locations and push offers, also use it to improve the in-store experience. Allow people to make in-store purchases with the app so they can skip checkout lines. Or let’s say you have a huge home goods store; design an app that helps people match goods, compare colors and bundle items. Then, after the user taps “Complete,” have an associate gather all the items from the warehouse while the customer browses or eats in your café.

Beacons: Use in-store WiFi beacons to make sales associates more helpful. For example, if someone pauses at one location in the store for over two minutes, he or she is probably struggling with a decision. That data is useful in merchandising and store planning, but that’s also a perfect moment for a sales associate to step in. Their arrival will seem timely and helpful, not creepy.

Spending Data: Use purchase data to help customers after they leave your physical store or ecommerce shop. Let’s say you sell health, fitness and sports equipment, and a customer buys a set of dumbbells. Instead of sending more product recommendations, send an article or video with dumbbell exercises and workouts. If a customer buys cycling shoes online, send a link to your cycling blog. Provide information that will help people get the most out of their purchase.   

My argument is that wearables and health apps are close and coveted because they are valuable. Although they do take data and sell it, they provide knowledge and guidance in exchange. To collect and use data without creeping out customers, retailers need to use some of their data to help customers. Anyone can offer a deal, but retailers that want loyal customers will make their lives better.

Jonathan Levitt is CMO of customer experience agency SonicBoom.