While consumers want to pledge their loyalty, retailers are going to have a tough time figuring out just how to build their allegiance. That’s because consumers state they are willing to share only a small portion of the personal information that retailers need to develop traditional loyalty programs, according to a report released Jan. 18 by the National Retail Federation’s NRF Foundation and Adjoined Consulting.
“Retailers looking to create loyalty will need to walk a fine line between specializing their services to customers and invading their privacy,” said NRF Foundation vice president Kathy Mance. “The more trust and goodwill a retailer builds, the more likely it is they will have a long-term loyal customer base.”
According to the study, “Retail Demand Insights 2006: What Drives Consumers?”, the most acceptable information shoppers were willing to give retailers were their name (89.8%), e-mail address (78.1%), street address (60.7%), and past transactions (46.8%). Consumers were least likely to allow retailers to track weight (14.4%), income (12.5%), job title (12.1%), employer (10.9%), and net worth (8.2%).
The results raised a red flag for Mark Goldstein, CEO of San Francisco-based loyalty program developer Loyalty Lab. The first question that came to his mind: When is the last time a retailer asked a consumer for his or her weight?
“That was pretty funny. Could you imagine the outbound phone call? If you ask any woman that question, they’d refuse to answer,” Goldstein says. “Just by looking at that alone, I threw that survey out.”
The NRF Foundation said the study shows retailers will need to strike a balance between offering loyalty programs and collecting customer information. But Goldstein says consumers don’t need to be intrusive about a consumer’s size.
Online plus-size retailers such as Lane Bryant and Catherines have “My Virtual Model” incorporated in their Website, which allows consumers to see how outfits would appear on their body shape.
And with proper data mining, merchants can find out their most loyal consumers’ sizes based on what they buy.
“If you’re a size 22 and you buy nothing buy size 22 at Lane Bryant, Lane Bryant is going to know you are a size 22,” Goldstein says. “Lane Bryant is not going to touch a question like weight with a 10-foot pole. There are other ways of capturing that kind of data – ask the online or catalog customer ‘Which woman looks more like you.’ It’s the same thing with skin complexion; retailers aren’t going to ask if you are black.”
The bottom line, Goldstein says, is that if a retailer doesn’t have a relationship with customers, the retailer is not even going to get basic data from customers. If you have a brand that consumers trust, and you have a privacy policy in place, the consumer will pretty much bypass that.
According to the study, the number of shoppers stating that they were long-term loyal customers dropped in 2006 to only 77.2% compared to 83.8% in 2005.