How Ikea is handing over control of data to its customers
- 19 February, 2020 08:38
Ikea's decision to give customers more control about how it handles their data signals the role privacy around customer data now plays in the brand marketer's toolkit, several industry experts say.
The Swedish furniture retailer is now giving consumers the ability to decide how the company uses previous purchases, product preferences and browsing history for product recommendations. The new customer data controls will be first introduced in its app and then rolled out across Ikea websites in the UK, France, Netherlands and Spain.
The changes to the app allow users to opt for a private session, which won’t record any of their activities. Ikea will also let customers nominate the length of time it can hold onto their data and not use browsing history for retargeting with digital ads.
In response, CMO looked at whether the changes signal a shift in brands handing back control to customers. Constellation Research VP and principal analyst, Liz Miller, described the decision as “more of a slow roll into compliance, than a radical shift towards security”. She pointed out the Swedish flat pack furniture giant has had a series of security gaffes and breaches in recent years and applauded the decision, while also sounding a note of caution.
“It demonstrates an understanding that exceptional customer experience extends to a customer’s data as much as it involves a customer’s wallet,” Miller said. “Today’s global consumer is tired of feeling used and abused by the brands they entrust their data and wallet share to.”
However, Miller saw the real test - for Ikea and any other brand loosening the reins on the ability to collect consumer data - will come afterwards.
“Will the company honour privacy and permissions at every touchpoint in the journey? Or will they re-introduce questions and re-ask in the hope someone forgets? How will Ikea prove this move is more than spinning regulatory compliance as a bold step in customer centricity?” she asked.
With GDPR in the UK, the California Privacy Protection Act (CCPA) and a raft of other bills and legislation elsewhere in the US, there’s an increasing focus on consumer data rights. Ikea isn’t alone in introducing more transparent permission and identity controls. Asos and Burberry, for example, have these types of permission and identity controls in place.
IDC marketing and sales technology research director, Gerry Murray, saw these changes as significant enough to expand the established five Ps of marketing into six.
“Privacy has joined Product, Price, Promotion, Place and People,” Murray told CMO. “At a minimum, Ikea’s new policy articulates a brand value about how they will respect customer data. Potentially, it could lead to more loyal and profitable lifetime relationships.”
It’s a sentiment echoed in Gartner’s 2019 Consumer Privacy Survey, which found consumers view protection of their data as part of the brand experience. However, there’s still a long way to go before consumer data controls are widespread. Gartner’s 2019 Marketing Technology Survey found just 50 per cent of marketing teams have a fully deployed consent and preference management platform or are currently in the process of deploying one.
The shift away from the wholesale collection of personal data could come down to the number. For Gartner senior director and analyst, Benjamin Bloom, the challenge of building trust with consumers now increasingly wary of the motives for collection (and track record for securing) their personal data, will collide with demands for ROI.
“Personalisation now comprises 14 per cent of the marketing budget, a level of visibility and investment that must also deliver results,” he said.
Marketers struggle to demonstrate ROI on personalisation efforts outside of digital commerce, which provides an opportunity to re-evaluate the data needed to deliver and measure personalisation. As a result, by 2025, Gartner predicts 80 per cent of marketers who have invested in personalisation will abandon their efforts due to lack of ROI, the perils of customer data management or both.
Murray believed another challenge for marketers is to shift from ‘more is more’ to ‘less is more’ when it comes to customer data.
“More contacts, more clicks, more conversions, more technology and more data. It applies to everything marketing does. That makes taking a lean data approach risky because it goes against the mindset culture and KPIs of every marketer. As a result, brands will be cautious until it is proven to be a competitive advantage,” he said.
Brands are on the start of a journey of understanding how they treat their customer data is how they treat their customer. Again, it all comes back to trust, Murray said.
“Every time you personalise, you reveal something you know about the customer even if it’s wrong. And if you didn't get it directly from them, it will cause suspicion about your surveillance practices and lower their trust in your brand,” he continued.
If a new relationship to customer data does develop - through legislative restrictions, customer expectations and financial imperatives - marketers will need to adjust accordingly.
“Customer data and consent should be exchanged for value every step of the way. Marketers need to move away from the mindset of data ownership to one of data stewardship,” according to Murray.
For Miller, the opportunity exists for a more authentic style of marketing by focusing on delivering value in the manner the customer defines and values in each interaction.
“In the end, all of this will come down to how a brand acts on these promises and commitments to security, privacy and the consumer," she said. "It is all well and good to give consumers control over their own data, but let’s see what happens in the next big breach - because let’s be honest here - there will be another breach.”
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