About a week ago, I was making my way down to my parents’ house from Groningen by car. I took the usual route and I made use of a mobile application to make sure there were no police officers on my route trying to catch me speeding. Just for the record, I don’t (usually) speed but it’s just nice to know. I always use this application, yet it has not figured out by itself which route I’m taking, nor had I made the effort to configure it. The crazy thing about this story; I have the audacity to expect this application to do that for me. This makes me a huge hypocrite because I’m sure that, if it did manage to figure this out, I’d be outraged by how intrusive it was. This is related to an increasingly common phenomenon in marketing where personalization conflicts with privacy. While third party cookies have already been shut down for privacy reasons, mobile data seems to be the next big thing. The crux: mobile data can actually offer significant and clear value to the consumer.
Does Privacy Really Matter?
Privacy is often defined along the lines of “an individual’s control over whether he or she cannot be observed or distrurbed by others.” While some are privacy-conscious, others are totally fine with sharing their information, usually under the guise of “I have nothing to hide anyways.” However, privacy is not only about keeping potentially embarrassing information secret. Very ‘un-embarrassing’ personal information can be used by criminals to exploit your identity. Furthermore, privacy is the key to freedom of thought and speech. Without privacy, you can’t hide your ideas; without that, you have to worry about justifying everything you do, say, and think. Subsequently, your ability to develop creative thoughts freely is severely limited. Accepting unreasonable threats to privacy can eventually catch up to us. Even if these threats seem minor.
Privacy Calculus and Privacy Paradox
The reason why privacy is somewhat paradoxical in nature for marketing (but also in general) is by the fact that consumers derive clear benefits from personalized experiences and have ‘learned’ to expect at least some level of personalization. Yet such experiences require personal information and thereby a breach of someone’s privacy. The academic research on the privacy paradox is actually quite extensive and divided. Some argue that it’s a myth, claiming it’s rather a matter of privacy awareness. The concept of ‘privacy’ can be somewhat fuzzy and subjective, which adds to the complexity of the problem.
The theory of privacy calculus helps us understand this paradox a little better. It states that privacy risks are acceptable to an individual under the condition that there are enough benefits involved. E.g., we all prefer to keep personal data to ourselves, yet many of us provide personal information to social media platforms like Instagram or Facebook. We do so because these platforms allow us to connect with others (social benefits) and provide entertainment (psychological). As such, we perform a privacy calculus and make our decision.
The Value in Omnichannel: An Example from Albert Heijn
The promise of the omnichannel experience is for a brand or retailer to ‘fit’ into your life like a tailor made suit. The Dutch supermarket chain Albert Heijn is a good example of this. This is an organization that has fully embraced digital transformation.
Firstly, you’ve got your digital bonuskaart, whereby everything you buy and might like is recorded. This can be linked to the Albert Heijn App, which provides personalized discounts.More recently, Albert Heijn introduced the self-scanner. One can pick up the handheld device at the entrance of the store or simply use the mobile app. The latter can be integrated with your shopping list to find an optimal shopping route. I.e., you don’t need to wonder about for ages to find your products in a ‘new’ Albert Heijn, nor do you have to wait in line anymore. Then there is the illustrious digital and physical Allerhande magazine. It’s actually a huge database of recipes with advanced filtering options. Moreover, it takes care of your ‘pain’ of not knowing whether all ingredients are available in one place. What is more, they can be delivered at your front door with a push of the button! As a matter of fact, Albert Heijn has been struggling to keep up with the demand for online shopping, to the extent that they had to put a hold on their meal-as-a-service format.
In a recent corporate report, it was stated that “Albert Heijn ultimately strives to offer a faster and easier experience for all customers to serve customers anyhow, anytime, anywhere.” Whereas Albert Heijn was a great place to shop, it will be a holistic and omnipresent answer to your food-related demands, independent of time or place. You have to admit that, even though Albert Heijn slowly takes over your life, it’s also pretty convenient.
Where Convenience Meets Intrusion
Hopefully you aren’t expecting this last section to be the “happily ever after” to the story, whereby I explain how privacy and omnichannel manage to set aside their differences and become inseparable soulmates. Typical… Right? What I can tell you is that the answer probably lies somewhere in the realm of consumer empowerment. The way things are heading in terms of privacy awareness (among the public and consumers in general) and regulations, firms getting away with covertly obtaining consumer data will be a thing of the past. Rather, the firms that understand the ins and outs of their customers’ privacy calculus will thrive. Those are the firms that can convince their customers that they will benefit from disclosing personal information.