New laws requiring more openness and transparency will change how organisations collect and use personal data, and give shoppers more control over how data about them is used. Our report explores how the sector can work together to turn GDPR from a compliance obligation into an opportunity to build services that meet shoppers needs.
The European Union General Data Protection Regulation presents a significant opportunity for the UK grocery retail sector. By proactively informing shoppers about their data rights and how data-driven services benefit them, organisations can build trust and strengthen loyalty, which will create greater buy-in from shoppers for data-enabled innovation.
Every shopping trip generates data. This can be about people’s shopping habits, preferred brands or interest in promotions.
By analysing data alone or together with third parties, retailers inform the entire shopping experience – from how to lay out stores and what products to stock, to what promotions to run and what offers to give customers. Among others, price-matching schemes and new delivery services are increasingly being developed using this data. These services can offer benefits to shoppers, helping people save time and money.
However, the UK retail sector must be vigilant in responding to changes in the data landscape. The EU is implementing the General Data Protection Regulation (GDPR) to give citizens more rights and control over personal data. The UK is implementing a Data Protection Bill which includes country-specific elements of the regulation. This creates compliance needs but also new ways of engaging shoppers around data.
Our research found that while shoppers trusted retailers with data more than technology companies, they were still uncomfortable with how retailers shared personal data. Encouragingly, shopper comfort increased when they were more familiar with data practices and shoppers wanted to exercise their rights to port and access personal data to both understand data practices and receive new services. Organisations will need to change the way they operate with each other in order to respond to shopper’s expectations.
When respondents felt happy sharing data about them (source: Britain Thinks, 2017)
Our research tested some potential business models and found interest from significant numbers of shoppers. However, our interviews with industry showed obstacles to seizing this opportunity, including cultural and commercial barriers that stop businesses innovating and sharing data in ways that shoppers want.
The report includes findings from desk research, interviews across grocery retail, technology, and government sectors and research conducted with shoppers through both quantitative surveys and qualitative focus groups.
Our recommendations for retailers and the grocery retail sector to maximise the opportunities GDPR presents are:
Build trust by communicating with shoppers:
- Run a data literacy campaign for consumers, to build awareness of data use within retail
- Focus on building informed consent and helping shoppers understand the benefits created by data sharing
Create a foundation for data-enabled innovation:
- Open up common reference data, such as products and retail locations
- Develop open standards to facilitate data exchange
- Create open APIs to reduce cost and friction when shoppers request to access and share data Create a strategic programme for the UK grocery retail sector:
- Form a cross-sector strategic working group on retail data to enable a collaborative response to challenges raised by GDPR
- Create and implement principles around data governance and usage for grocery retail
Retail is in a position where it can take advantage of the existing trust consumers have. We found that retailers were mostly focused on GDPR compliance at the moment and refining their internal data practices. The opportunities for innovation – services and products that could be built on top of data – was not on their radar yet. Together, the sector can build data literacy with consumers and improve the foundations for data-enabled innovation to help respond to shopper needs.
– Jeni Tennison, CEO at the ODI.
If you want to discuss this report do get in touch by emailing us at [email protected].
- Access the full outputs of the research conducted with shoppers by Britain Thinks
- Listen to the ODI and dunnhumby discuss the report