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12 May 2015

Data Protection: Blessing or Curse?

In this day and age, customers who shop online expect to be offered personalized content, and they expect their needs to be detected and met in real time. If you haven’t experienced it already, you log on to Amazon, and you are directly presented with your recent orders, the latest promotions, and also product suggestions tailored to your own personal surfing and purchasing behavior. Naturally, that feeling of "what exactly do they know about me" is there at first, but let's be honest: who hasn’t looked at or even bought one of those suggested products at one time or another?

Additionally, the question of whether this is purely a German or perhaps Western European way of viewing things always remains. In North America, or if nothing else, in the Far East, this kind of data collection and the personalized offers generated by it are viewed as a service rather than spying. Don’t get me wrong – data protection has to and should be regulated by law, so that industry commitments won’t work in a field where even minor transgressions can mean a competitive advantage.

At the end of the day, it is a question of trusting the company we’ve already placed an order with – those to whom we entrust payment and hope for the subsequent delivery of our goods. On one hand, we expect orders and returns to be processed quickly. On the other hand, we don’t want the retailer to save order information for a year, and be able to use it to improve communication with customers. It is best to observe the ambivalent behavior of data protection when using social networks: we simply get exasperated by the personalized email from a trusted retailer asking how satisfied we were with the order, because with the help of Facebook and others, we’ve already informed the world about our new purchase. That, of course, includes a scathing review of the retailer in question.  

Ultimately, everyone can decide for themselves whether to post about their purchases on Facebook, to give the retailer a review when prompted, or to only order from vendors who offer anonymous checkout. To this end, you don’t always need more detailed regulations, but rather responsible citizens who understand how data collection and processing work in the Internet age, and who are able to assess the consequences of their dealings. We are currently at a point where the way the majority of users behaves automatically results in a reaction on the part of the retailer.

But until we get there, how should vendors in Germany or Europe react? How much data should they collect; how should a personalized sales approach be designed? Imagine you have a web shop and are trying to decide whether or not to introduce a web analytics tool, personalized product recommendations, and a newsletter solution. Would you choose not to introduce these tools because that’s maybe more in line with the current sentiment? Numerous statistics attest that when in doubt, people usually decide for rather than against the introduction of these tools.

As long as retailers do that in the interest of customer loyalty and trust, as well as in accordance with the law, there are no objections. There are also plenty of solutions that comply with European data protection law and are hosted in Europe. Especially when it comes to international offers, without the proper marketing tools, you will quickly fall behind competitors – those from North America, for example. This doesn’t raise the question of whether there is a solution, but rather which one. Now is the time for the inevitable marketing message, and if you’ve never clicked on a product or item recommendation, you’re excused at this point. We recommend that everyone else pay a visit to our website at www.yoochoose.com. There you will learn more about how we can improve communication with your customers through product recommendations, personalized searches, and email messages.

With its solutions for market recommendations and personalization, YOOCHOOSE has been in operation for over 6 years, and we place a lot of value on data privacy. We host our solution for European customers only in Europe, and we anonymize client profiles. But why should that be an argument for data protection? Because with it, the evaluation of the customer profile (i.e. which items they view, buy, and may potentially be interested in) is saved and processed separate from their personal data, such as name, address, and payment information. Only the online retailer has your personal data. The data collected by YOOCHOOSE is recorded using web tracking based on a customer number or other anonymous identifier. The online retailer receives the recommendations and search results directly from our system based on these anonymous identifiers, and can display them in the shop or use them to personalize email campaigns. In our opinion, this is a good solution that allows retailers to provide personalized content for their customers, but to not collect the requisite profiles themselves, or to save and link them with personal customer data.

Author: Michael Friedmann, Founder & CEO of YOOCHOOSE

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