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Comment: Why are retailers so afraid of Midata?

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In light of news last week that the government may soon force brands to make available consumer data, Ian Stockley, MD of Customer Intelligence agency Indicia explains the story behind the Midata initiative, and asks what retailers are so afraid of.

The Midata scheme was announced with much fanfare last year, as part of the government’s open data policy. The following white paper, released in June, set out strategies which could be groundbreaking in terms of accountability and transparency if they come to fruition. With the aim of a greater level of democracy, the paper promised to make data more freely available, and more easily digestible – covering everything from health, education, transport, crime and more.

As part of these plans, Midata was an optimistic call to action for brands to follow suit. Consumers can already request such data through the Freedom of Information Act – but Midata was designed to make this process a lot easier by having brands offer this data up of their own accord. The result however, was incredibly disappointing. Just 26 brands signed up, with not a single retailer amongst them. It begs the question, what have these retailers got to hide?

What’s most mysterious is that Midata was an open goal for retailers, to use a sporting analogy. The government had set up brands to steal a march on competitors and take a first step towards creating a dialogue with consumers and establishing trust. By volunteering, brands would be doing something positive for their consumers without prompt – something that there is already an appetite for. There is a host of new apps and tools emerging each week as consumers look to analyse their own spending habits and adjust accordingly. Self-measurement is nothing new either – and arguably it’s only ever been a matter of time before the tools we see applied in the fitness and dieting arenas were expanded into all walks of life.

So why the reluctance? Sadly it seems that many retailers are still stuck in bygone eras, stubbornly clinging onto old values that no longer apply in the modern marketplace. After all, data is knowledge, and knowledge is power. Power used to sit with marketers but with new channels opening, that balance of power has shifted. Consumers can hold brands openly accountable when promises aren’t kept and customer service is sub-par. Once upon a time, it was perfectly legitimate to claim ‘A Mars a day helps you work, rest and play’. But with the wealth of information now open to them, not to mention price comparison websites, consumers are making more informed purchasing decisions. The lack of control, for many, is terrifying – hence explaining their reluctance to relinquish further.

What’s interesting though is that there is a clutch of retailers that have taken the first steps already. Sainsburys, Tesco and Asda all willingly give consumers price comparison updates upon checkout. The product stands up to the test of comparison, the retailer is empowering the consumer to make an unbiased purchasing decision and is much the better for it.

This is where the perception lag lies. Signing up to Midata doesn’t necessarily mean emptying the entire bank of data held on unwitting consumers, warts and all – it’s a willingness to engage in similar schemes such as this. One of the main concerns said to be held by the large supermarkets is that such a move would undermine the data analysis they currently run, but to release such a huge mass of data all at once would undoubtedly be overwhelming and most importantly, unwanted. If retailers work alongside consumers, they can understand which data they would like to see, and offer it to them accordingly. Retailers already likely get thousands of FOI Act requests each time a privacy/data story breaks, of which I imagine few are welcome. Instead, retailers need to get on the front foot and take advantage of this thirst for data.

Any further denial of data relinquishment points to a real truth at play, which is that the only reason for secrets in marketing is if you’ve got something to hide. If a little brand honesty is going to send customers to competitors, then it’s your brand that needs looking at, not the consumers. Instead of working on the latest flashy ad-campaign, why not look at ensuring you come out on top when consumers have analysed their spending habits and made informed decisions on how to purchase? Why not look at ways to establish long-term relationships with a sustained dialogue, which builds trust in your brand values?

Offering up bite-size chunks of valuable consumer data is an incredibly easy first step towards such a relationship. In holding such data, brands have to hand something of value to consumers, which can be exchanged for something in return (i.e. loyalty and further, actionable data).

The value exchange is fast becoming a fundamental truth for the modern marketer, and the skill is finding ways to maximise its potential. With the increasing amount of channels now open for consumers to hold brands accountable and demand better standards of service, the opportunity for marketers to steal a march and begin creating these emotional connections now is one that far too many are passing up.

Brands should have heeded the warning signs in recent years and already accepted the need to create a two-way dialogue with consumers, rather than keeping them in the dark. Such empowerment and such a wealth of available data naturally means a greater emphasis on brand experience as the primary differentiator between competitors. High-street retailers are already facing a battle to fend off the threat that e-commerce poses to their custom – with no value exchange and no trust, what motivation does the consumer have to go to that brand?

Published on Thursday 30 August by Editorial Assistant

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