What kinds of personal data can retailers collect?

For retail businesses who want to remain competitive in the market, it’s becoming all the more important to collect and analyse customer data constructively. These insights are invaluable for companies, since they can be leveraged to create more personalised experiences for shoppers, while also using the data more broadly to determine long-term trends and focus areas for the business.

Often, this process happens online. And, with internet shopping becoming more prevalent in this digital age, there are more opportunities than ever for businesses to capitalise on this treasure trove of information. However, data collation can take place in brick-and-mortar shops too through a variety of means.

No matter the collection method, all of this information is generally stored, processed and managed on a centralised data platform, which makes it easier for companies to garner more meaningful insights. In this quick guide, we run through three main types of data retailers are likely to collect from you before, during and after a transaction.

 

Basic personal information

 

Basic personal information encompasses data that directly identifies an individual and facilitates initial interaction and communication between the retailer and the customer. This category usually includes things like your name, address and contact details. Basic information can be attained in a number of ways, but the most common include registration forms (signing up for an account or newsletter on an app or website) and loyalty programs, when customers share information to access exclusive offers and rewards.

One of the primary reasons why this data is important for retailers is so they can establish effective channels of communication with their customer base. Whether that’s sending order confirmations/shipping notifications or sharing marketing collateral, email addresses and phone numbers are important for all parties involved in a transaction. By collecting and utilising basic personal information wisely, retailers can create more meaningful interactions with their customers, drive engagement, and ultimately increase sales. However, it’s essential that businesses handle this data responsibly and transparently, ensuring that customers’ privacy is always prioritised.

 

 

Transactional data

 

One of the key benefits of data tracking for consumers is the opportunity for more personalised shopping experiences. Much like how a streaming service might recommend a film or a song that aligns with our habits and tastes, retailers have the power to promote specific products to the customers who are most likely to be interested. This data is largely ascertained through point of sale (POS) systems – whether in-store or online. These machines process vast amounts of data, from purchase histories to inventory information.

By analysing this data, retailers can gain insights into individual customer preferences and shopping habits. For instance, if a customer frequently buys vegan products, the retailer can recommend similar items or notify them of upcoming sales on vegan-friendly goods. For the customer, this level of personalisation can drastically enhance the shopping experience by making it as relevant and convenient as possible. This can help to build trust and drive brand loyalty, since their needs and expectations are constantly being met.

Meanwhile, retailers stand to benefit from additional sales by showcasing more products of interest. Furthermore, transactional data can help in identifying trends and patterns that can inform broader marketing strategies, ensuring that promotions and recommendations are aligned with customer preferences.

 

Location data

 

Location data refers to information about the geographical position of a customer, which can be derived from various sources such as IP addresses, GPS data, and even in-store Wi-Fi connections. This type of data helps retailers understand where their customers are both in real-time and historically.

While this may sound intrusive, there are lots of advantages to allowing businesses access to this information. For example, you could benefit from regional promotions, or receive information about the nearest shop. In addition, these in-app services could send push notifications to remind customers of any outstanding rewards or offers available in their digital wallets. More broadly, as we’ve already become accustomed to on Google, this information can help customers and prospective customers make more informed shopping decisions by seeing how busy or quiet a physical store is at any given time.

There is, of course, a question of ethics when it comes to tracking location data; while it does offer numerous benefits to both parties, it’s essential that retailers handle this sensitive information responsibly. The two key pillars of this are transparency – businesses need to get explicit consent from customers – and establishing effective data security measures to protect consumers and uphold compliance with legal obligations. By leveraging location data thoughtfully and ethically, retailers can significantly enhance both the online and in-store shopping experiences.

 

Safety first

 

As a consumer, it’s important to stay informed about data privacy and ethical practices in retail. While the benefits to sharing data are abundant, your safety should always come first, and you should feel confident and empowered to respond appropriately whenever you’re prompted to share personal information.

 

 

Please note this is a contributed post.