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Privacy Perspectives | Brick-and-Mortar Retail: The Design Challenges of Communicating Consumer Data Collection Related reading: Ontario IPC talks legal, ethical issues involving de-identified data




Increasingly, retailers are gathering data—such as location—from consumers’ devices when they are in a store. This data can be used by retailers to optimize merchandise layout and for other purposes. However, a recent survey we conducted shows that only 33 percent believe that this is happening.

Research confirms that consumers want transparency around data collection. If they don’t expect that data is being collected and find it out after the fact, trust in a brand can erode. Even if the consumer gets a benefit from the data collection, this negative ‘surprise factor’ is still there—and the negative reaction is even stronger when there is no clear benefit to them.

The resulting design challenge is to communicate to consumers that data is being collected, provide controls if consumers care to opt out and showcase how data collection can create value for the consumer.

The first step in the design process is to understand the context of use. We conducted a series of research activities around the topic, observing and/or interviewing 1,917 consumers in a wide variety of settings including malls and standalone stores, urban and rural locations, day and evening, weekend and weekday, and so forth. Retailers were selected to ensure a wide variety of products and consumers and may or may not actually engage in collection of consumer data. Retailers visited included Bloomingdale’s, Costco, Hollister, Macy’s, Marshall’s, Neiman Marcus, Pottery Barn, Target, TJ Maxx, Walgreens and Walmart.

To understand how retailers could create in-store awareness of data collection, our first research question was regarding what consumers pay attention to while shopping.

We first observed where people ‘looked’ while in stores. Costco provides a good example of what we observed. Their broad selection of product types allowed us to observe multiple types of behaviors. While there were many types of signage in the store, price signage was looked at most.

In the TV department, people tended to look first at the price sign and then at the product. Our hypothesis is that TVs are a commodity purchase and many of them ‘looked the same’ to consumers, so people looked first at price and then evaluated brand and features. In the seasonal department, people scanned the merchandise first—as it is unique and continually changing—and only looked up at the price sign if they were interested in an item. In the food section, we saw fewer gazes at prices. Our hypothesis is that comparison shopping is less likely because Costco does not carry multiple brands of a given item. So a shopper who is only at Costco to purchase food may not view any signage.

Next, we ran an experiment to determine how aware people were of current in-store messaging and if certain types of signs or locations were best. We asked consumers to purchase a specific item in a store, and then after the purchase we tested their recall of in-store messaging. On average, consumers only recalled nine percent of in-store signs.

We then showed them a series of photos of signs, some of which were in the stores where they shopped and some from other stores. Consumers were more likely to identify signs that were not in the stores vs. signs that were in the stores. Shoppers only identified 27 percent of the signage in store. 36 percent of the signage they thought was in store was incorrect.

Also, zero percent of the shoppers in Santa Clara County, California saw the consumer protection sign which was at the checkout of all stores visited.

We find that relying on in-store signs, logos or messaging as the sole channel for creating awareness of data collection will not work. We must explore other channels and timing to create transparency.

In our next post, we will share with you our findings regarding the potential to use technology for in-store messaging.


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