Is Personalization an Invasion of Privacy?

While participation in loyalty programs continue to grow across all retail channels, research from Mintel reminds retailers of a new challenge: personalization versus privacy.

Loyalty program members crave a more personalized experience, yet they also show concern about sharing all the information a retailer needs to deliver a valuable and relevant experience. The Mintel study revealed 32 percent of loyalty members are concerned about their privacy. Additionally, one in 10 members expressed frustration or dissatisfaction with the level of personal information being requested upon enrolment.

As further evidence of consumers’ mixed signals between their desired level of personalization and the hesitancy to provide personal information, 16 percent of loyalty participants believe loyalty programs are not tailored closely enough to their shopping habits. This trend is particularly true among Millennials, the generation notorious for expecting a convenient and tailored shopping occasion.

So, what is a retailer to do? It essentially comes down to finding the right balance. Given Millennials’ strong propensity toward environmental and social responsibility, retailers may want to incorporate social issues into a loyalty program to improve willingness to fork over personal information.

Another action step actually lies within the mechanisms of a loyalty program. According to Mintel, there are five factors consumers find most appealing, and not surprisingly, most revolve around simplicity:

• Ease of redeeming rewards
• Ease of earning points
• Monetary rewards
• Access to exclusive deals and coupons
• Easy enrolment options

If a retailer can achieve and communicate these specific program elements, older consumers may become more willing to share personal info.