Here, there, everywhere: how omnichannel retailers can adopt the best data security and privacy approaches across stores
Across the UK 3 million people work in retail, with the sector comprising roughly 5.1% of UK GDP.It is one of the largest private sector employers in the UK and is vital to the economy.
The world is turning more digital by the minute, and retail has been taking advantage of that. One key way to deal with economic recessions, global pandemics, and swift changes to consumer habits has been to use tech to innovate and adapt.
Omnichannel retail (i.e. when customers can shop products through all channels for a frictionless experience) means social media and apps are the perfect pools of opportunity. An omnichannel approach grows outreach with potential customers, provides more options to buy, and various ways to communicate with your audience.
But between Brexit, the covid-19 pandemic, and inflation, retail has seen a lot of challenges in recent years.
In 2020, retail sales (for in-store non-food products) declined by 24% in comparison to 2019 - an estimated £22 billion loss. Several national lockdowns led many retailers to close their stores across the country and footfall in UK retail stores was down over 40% in 2020.
Those who failed to adapt were retailers with a poor online presence or a single channel approach, who suffered large losses. In 2020, online sales rose to a record high of 33.9% of retail profits. Primark, who did not sell online and said it had no plans to do so, closed 305 of their 389 global stores, including all 190 in the UK. As a result, they lost an estimated £1 billion in sales during the height of the pandemic.
Post-pandemic, companies have scaled down their physical store presence to keep up with online demand.
Out of over 500 retailers and 1000 consumers, 97% of UK consumers make monthly purchases online from both third-party and brand-owned websites.
Essentially, customers interact with multiple sales and media channels all at once. Linking the chain: websites, app, social media and in store, allows customers to have one single, streamlined experience.
How do retailers use tech to do this?
“Immersion and interactivity; personalisation and exclusivity. With digital sales rapidly starting to overtake those from bricks & mortar – brands will increasingly need to provide a credible reason to make a physical purchase. Digital will never replace a great in-store retail experience, but it will greatly influence customers’ perceptions of what a great experience is.”
Everyone knows that the ultimate goal is understanding the customer demographic. With trends moving to a more individual approach, tracking customer behaviours has been a proven useful way to achieve this. To anticipate shopping habits and cater to consumer preferences.
And this is what consumers want.
About 75% of consumers want a consistent retail experience.
68% believe it is critical that retail store employees understand their preferences and needs.
Two of the big drivers of retail habits are experience AND convenience - and the flexibility for both.
Linnworks found that 78% of survey respondents value convenience more now than before the pandemic. 76% consider it a top priority when choosing retailers.
Online (website, app, etc.) blended with physical (in-store) - the "phygital" - means more data. More data from several different platforms means more personalised customer experiences.
“Retail in 2025 will be all about multi-sensory social sanctuaries. Digital will be able to give us convenience through rapid delivery and immersion through VR so retail spaces will be the place to go for physical, face to face interactions that either excite or relax.”
The data protection angle
So it sounds great but what’s the catch? Retailers need to utilise information from these different platforms securely.
Properly implementing an omnichannel experience can be tricky. On the one hand, recent surveys have shown that consumers prefer personalised shopping experiences that translate across all channels from brands. However, they are increasingly aware of their data privacy and many are wary about giving businesses their personal information.
One of the major barriers to omnichannel approaches is consumer fears about data security.
Many are concerned about sharing their banking information across different platforms, particularly social media websites. While some of the responsibility for transactions should fall on the hosting social media platforms, the brand is often the one who receives backlash and a damaged reputation when things go wrong for consumers. Whether this is right or wrong is debatable, but nevertheless, ensuring businesses do everything possible on their side to secure transactions is important.
Data is essentially the backbone of an omnichannel experience - to create this seamless customer experience, you need access to vast troves of it.
This is even more important if you want to utilise facial recognition technology (FRT) to scan faces entering physical stores. This data (especially sensitive biometric data) needs to be managed properly and responsibly, and retailers need to be aware of the law as well as the risks.
Trust is important!
Good brand reputation is essential. For this, trust is vital. When consumers trust your brand, they are more likely to feel comfortable giving you access to that level of personal data.
As privacy rules become even more expansive and more stringently enforced, retailers will have to adapt their behaviour accordingly. Laws like the General Data Protection Regulation (GDPR) and the California Consumer Protection Act (CCPA) all have requirements for how personal information of consumers is collected, processed, and stored. For multinational companies, their omnichannel approach will have to be tailored to each jurisdiction, keeping in mind their individual requirements. These laws also can carry heavy financial punishments for failing to comply.
Transparency is trending as a way to communicate data practices with your consumers. This means easy to understand privacy policies and how you use cookies, trackers, etc. This is also the case for data security - communicating with consumers about secure data practices can further enforce a good brand reputation. If you use video analytics and facial recognition in stores, consent is required and consumers need to know what is happening.
Consumers want their shopping experiences to be as convenient and easy as possible. Adopting an omnichannel approach where customers can have a seamless blend of the online and the physical will be more important than ever.
By ensuring they implement all the correct safeguards and checks across all their different mediums, retailers can maximise their sales opportunities while still respecting the data privacy concerns of their consumers.