Uwe Stueckmann, Loblaw’s senior vice-president for marketing, makes a point at PC Plus loyalty program launch in 2013.Fernando Morales/The Globe and Mail
When President's Choice needed to promote its new loyalty program to consumers, it did a few temporary renovations and turned its grocery locations into "personalized" stores.
In commercials last year, Galen Weston Jr. welcomed shoppers to "Lindy's supermarket," showing them displays including "Julie's chorizo sausauge."
"It knows that I like celery," said a delighted woman.
It was a sign that Loblaw Cos. Ltd. was taking a specific strategy with its loyalty program: telling people who shop at the company's stores that their purchases would be recorded and tracked, but that they would be offered something of value in return: rewards for buying the things they like best.
In an age of "Big Data," companies are scrambling to better target their communications with customers. If done right, businesses hope that this will eliminate more of the irrelevant advertising that makes people tune out at best and irritates them at worst.
But it has also thrown the advertising industry into a potentially damaging situation. As more of our behaviour is tracked, both online and off, many consumers are becoming wary about how their information is stored and used. Combine that with repeated instances of massive breaches of data security, and the corporate world faces the threat of losing the trust of consumers altogether.
A new study is attempting to track the attitudes of people around the world on this important issue. On Monday, Montreal-based Aimia Inc., which operates Aeroplan and other loyalty programs globally, will release its survey of 24,335 people in 10 countries, including roughly 2,600 in Canada.
More than half of those surveyed – 55 per cent globally and 54 per cent in Canada – said that they were willing to share their personal information as long as companies sent them "relevant offers and discounts" in return.
People understand that information is valuable.
When asked to rate how much their data was worth to companies on a 10-point scale, nearly two-thirds of those surveyed said between 7 and 10.
But marketers should be cautious about how they respond. There is some behaviour using personal information that shoppers will find creepy. For example, 37 per cent of Canadians said that supermarket staff greeting them by name would be "nice," while 42 per cent said it would make them uncomfortable. They were more comfortable being called by name by airlines, possibly because they are aware through the booking and check-in process that they have provided that information.
One area where consumer data is particularly important is in mobile advertising, where companies send people real-time offers on their mobile phones. But consumers are cautious. In supermarkets, 66 per cent of Canadians said that offers on their phones would make them uncomfortable.
"The complexity of the context is something that, if a marketer doesn't feel their way through that, they can misstep," said Aimia's chief business development officer, Kevin O'Brien. Similar to e-mail spam and telemarketers calling at dinner hour, he said mistakes in data use will teach marketers what not to do.
As a loyalty program, Aimia has a stake in presenting these findings: Like many who use customer information, it has made efforts to show its understanding of the importance of privacy.
On this issue, loyalty programs have touted the consent that is inherent in their relationship with their members. People know when they sign up that their information will be tracked.
But loyalty programs still scored relatively low on a list of the organizations people trusted most with their information, behind utility companies, employers, mobile phone providers, supermarkets and banks.
Another finding in the survey was just how skittish people were about their online behaviour being tracked. Despite the frequency that people offer up personal details on platforms such as Facebook, social networks scored lowest in trust with personal data.
What's more, nearly half of survey respondents said they would never share their online browsing history.
That's bad news for the industry, which is turning to digital data in an effort to create more relevant ads. Advertising groups have launched a program to give people more information about how their online patterns are tracked, and to give them the ability to opt out.
"If it's behind the scenes or feels covert, that's a risk area," Mr. O'Brien said. "… We've got the risk of not doing it well. And shame on us as an industry if that's the situation we end up in."