Customer Experience, Welcome to the Big Data World: More Personalization, Less Privacy; Subway man by Asa Aarons
Yesterday we told you how retailers use "super spy cams" and other technologies to analyze store traffic, set staffing, reduce check-out line backups, monitor inventory and improve the overall customer experience. They use facial recognition software to identify VIP shoppers or nap shoplifters and identity thieves.

Companies like NEC Corp. use security camera footage to understand the behavior of crowds and to "detect abnormalities" to improve safety. But what's the reality? Security gained … or privacy lost?

Grappling with New Technologies

Last year, the US Federal Trade Commission released Best Practices for Common Uses of Facial Recognition Technologies. It suggested companies maintain reasonable data security protections for consumers’ images and the biometric information collected from those images, provide clear notice to customers that the technologies are in use and refrain from using facial recognition to identify anonymous images of a customer to anyone who could not otherwise identify him or her, without obtaining the customer's express consent.

Most people remember their first time … the first time they received personally addressed unsolicited mail, that is. It had a way of making the recipients feel important, as if the aluminum siding company sending the marketing materials was speaking directly to them about an offer to renovate their homes. Suddenly, unsolicited messages were no longer junk mail but offers worth considering.

The Lure of Personalization

As big data has ballooned, so have the options to create more targeted and almost intimately targeted messages, in the online world and beyond. Companies like SAS, a developer of analytics software, claim customers not only prefer personalized marketing: they expect it.

Retailers understand that. Some, like San Francisco-based Williams-Sonoma, a specialty retailer of home furnishings and gourmet cookware in the U.S., claim it's important to keep marketing relevant -- personalized, that is -- so it doesn't feel like spam to customers.

John Strain, Senior Vice President and CIO for Williams-Sonoma, told me the company relies on high-performance analytics to grow its business and increase customer satisfaction through more accurate and targeted marketing. It's capitalizing on massive amounts of data, ranging from demographics and purchase history, to the time of day people shopped and the products they considered but did not buy, to drive personalization, relevance and speed of delivery, he said.

As retailers have shifted from mail to text and email marketing, personalization may be even more important. Jack Philbin, CEO of Vibes, a company that provides mobile marketing solutions and chair of the Mobile Marketing Association, stressed that point at the Adobe Summit earlier this year. Mobile marketing efforts need to drive action and be “very targeted and interesting” to be effective, he said.

Learning Opportunities

Just Don't Make It Too Personal

More recently, Forrester warned marketers to redefine their in-app ad strategy to target the right audience in a way that does not disrupt the app experience and tracks metrics that match their marketing objectives.

But there is a fine line between personalized and invasive, according to Tamara Gruzbarg, director of analytics at Gilt Groupe. "When you dig very deep, you can get pushback from your customers," she told me in an interview.

Gilt Groupe is a membership-only shopping website that runs daily private sales of everything from clothes and shoes to home decor and travel opportunities at discounts of up to 60 percent. While it has been successful with personalized marketing, it stumbled a few years ago by launching a massive email campaign around the "We've got your size" message.

Since the site offers limited quantities of size-specific products, it expected customers to be excited to learn about items available in sizes they had previously ordered. But they weren't. Maybe someone ordered two size small dresses last year, but aren't small anymore -- and didn't like to be reminded about it, Gruzbarg explained.

(Tomorrow: The wireless beacon in your pocket)

Title image by Asa Aarons/all rights reserved.