Big Data \”Has No Clothes\”

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\"GERMANY-US-The Millennials Love It

It’s a strange world and these are strange times we are living in. We witness nerdy Edward Snowden, outing and vilifying the NSA for seeking to make the world’s population transparent, while at the same time making himself transparent to the entire world. And, I suspect at some level, he’s been quite enjoying his sudden (transparent) notoriety, however controversial it might be.

Yet the irony of Snowden’s purpose in outing the NSA is that his fellow Millennials seem to live, breathe and happily embrace transparency in everything they do, from posting every flake of cereal they ate on Facebook, or tweeting about the bug that just ran across their desk, or “I’m walking down the street now,” and, of course, the height of transparency, “sexting” (which, I know is not confined to Millennials – witness Anthony Weiner).

So, Snowden believes the NSA is invading the privacy rights of citizens, while a whole generation (his, and commercially, the most important for the retail industry), has expanded the acceptance of transparency in their lives, almost beyond limit.

Snowden’s purpose and fate are beyond my pay grade, but the irony of “bad” big data (“Big Brother”) according to Snowden, and “good” big data, apparently welcomed by his cohorts, did not escape me. And the discussion of big data could not be more timely. It is the buzzword of the day, almost replacing “omni-channel.”

A Big Data Outing

In fact, if Edward hadn’t been in the pickle he was, stuck in Russia, he might have been just the person to deal with the so-called spying that’s going on in retailing. All kinds of technology tools have been used by Amazon, Google and many other e-commerce platforms and software programs to identify, profile and track customers’ shopping behavior, all intended to build a better, more customized shopping experience for those customers. And what’s wrong with that? Just as the NSA says they’re using the data to deter terrorist attacks (a good thing, right?), then why isn’t using data to satisfy consumers’ desires a good thing? And not a peep has been heard from ‘e-customers’ about being spied upon, (a good portion of them Millennials).


Well, what’s good for e-commerce customers is apparently not good for physical stores’ customers. Several new tools have been developed to track customers’ behavior from the time they enter the store, through to check out. Traffic counters, video surveillance, signals from cell phones and apps are all being used in various ways to gain the same information being mined by their e-commerce competitors. Nordstrom, Macy’s, The North Face, Cabela’s, Family Dollar, Warby Parker, and dozens of other retailers are testing and/or using these technologies to determine how many customers enter the store, gender of the customer, how they traverse the store, dwell time in certain areas, total time in the store, repeat visits, and more.

The store can use the data to change store layouts and presentations, offer customized coupons while in the store, better manage and train associates, or even ping a loyal customer’s cell phone app about a new item while the customer’s within a two-mile radius of the store.

Snowden-Like “Whistle Blowers”

All a good thing, right? A win-win for both customer and retailer. Well, as has been reported across media land, apparently there have been several “Edward Snowdens” as shoppers complaining about being tracked and profiled, enough so that some retailers are questioning the use of these technologies, or at least how they should use them.

Nordstrom was erroneously cited in the media as terminating an experiment with these tracking technologies due to customer complaints. However, a spokeswoman for Nordstrom denied that was the reason. They simply felt they were gaining the same information from their associates, although, she did acknowledge that there were some complaints.

However, while these complaints are anecdotal, coming from several retailers, nobody has quantified how many among those “whistle blowers,” so to speak, were of the Millennial generation. My guess is not many.

In a recent study by Brick Meets Click, 64% of retailers are tracking customer-shopping behavior (both online and off), and are building big-databases, according to Advertising Age. And a Horizon Media online consumer panel survey of 3000 shoppers found 7 out of 10 were at best, only somewhat aware of being tracked. When asked if the data collection is invasive or beneficial, just over half were in the middle. And among those that feel it’s invasive, about 3 in 5 have not changed their shopping behavior to resist being followed.

So while these studies do not single out Millennials, my sense is that their peers would provide even more favorable numbers in support of being tracked.

Retailers, Stand Your Ground

These technologies and the big data they can generate is a big deal, and will be more so in the future.  It is the retailer’s last, biggest opportunity in the value chain, the most important part of the chain, when the consumer is deciding to purchase or not. With this information, they can understand what is attracting them and why.  It’s another tool to probe their minds, their behavior, and their desires, so that the retailer may capitalize on it to have the right product, in the right place, at the right time, for the right price — and all accompanied by friendly, professional associates and a great experience.

For the retailer, having this data gives them a “first down and goal to go” with the intelligence to know precisely what play will score the touchdown.  So don’t expect retailers to back off from perfecting this all-important final connection with consumers. And they shouldn’t.

And however consumers may be put off by this, I believe they are few and they are older.  Once again, the Millennials will decide how they want to be engaged, since they will comprise 30% of all retail sales by 2020.  And we all know where their heads are regarding transparency.  They couldn’t care less about who is looking into their brains, much less at the rest of their bodies.

According to Judy Russell, CEO of consultancy Markethink, “Millennials have grown up in a world of transparency, lack of privacy, and heightened security. They accept the fact that everything they do is potentially public information, unless they\’re savvy enough to disable the GPS on their phone and remove the Google tracking cookies on all their electronic devices. Even those tactics aren\’t foolproof though, because everyone everywhere has a camera at his or her fingertips every moment of the waking day. My daughters rarely go out of the house without at least a little makeup on because every chance encounter with an old or current friend invariably results in a potential Facebook or Instagram moment.”

Our resident Millennial, Grace Ehlers, trends analyst, weighs in on the subject, “Millennials\’ relationship with transparency and sharing ‘everything’ is changing.  Big Data was always seen by us as a technical possibility, potentially to be misused by brands at worst, but not by the government.  Millennials are also the canaries in the coalmine for tech use and transparency — you can be sure that there is a trickle-up effect for Millennials teaching their parents, and grandparents the benefits of their apps and social networks.  Snowden\’s unveiling of the NSA Prism agenda isn\’t antithetical to the sharing that Millennials part-take in; it is emblematic of the Millennial movement to protect that information and guard how it is used.”

So, just as Millennials may embrace transparency, they are just as quick to spot invasive commercialism, and will dump you in a nanosecond., and as mentioned above, will be vigilant guardians of privacy. Therefore, how retailers end up using all of this data had better be in an honest, polite and respectful way. Any ‘sleight of hand’ and it’s over.

Not surprisingly, a research group was organized, called the Future of Privacy Forum, to create a series of “best practices” for control over privacy to guide the kind of retail analytics and tracking that retailers are now implementing. So, “good” big data is here to stay, and will only get more robust. In the end, it will simply mean a better customer experience and more business for the retailer who uses it properly and strategically. “Bad” big data, either the big-brother kind or the kind that is used invasively on consumers, will disappear.

Edward Snowden may be the tip of the iceberg in the battles to come about privacy. The interesting thing in all of this is the age divide between those who abhor transparency and those who believe it to be a basic human right.

As for Edward, in my opinion, the more opaque he is, the better — maybe in Siberia.



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