Thursday, June 03, 2010

Let Us Track Your Shopping And We'll Reward You

Facebook's data privacy flap has put the subject of database marketing top of mind. This is by no means a new discipline, having been around since the 1970s, when American Express and others broke new ground in employing consumer behavior tracking for marketing purposes. Every successful catalog ever since has made use of it, with varying degrees of sophistication. eCommerce merchants didn't take long to jump into the pool, and swim faster and deeper than their paper-based predecessors.

When Doublelick bought Abacus (a database marketing innovator, now a part of Epsilon) in 1999, it caused a few ripples: privacy groups hotly opposed the merger on grounds that it could increase the likelihood of corporate abuse of customer data, combining Web surfing habits obtained from 5 billion ads DoubleClick served per week in those days and the 2 billion personally identifiable consumer catalog transactions recorded by Abacus. But those concerns quickly subsided. No doubt the current brouhaha has to be put in that perspective.

In article in today's New York Times, Stephen J. Hoch, a marketing professor and director of the Jay H. Baker Retailing Initiative at the University of Pennsylvania’s Wharton School, observes that “'People are a lot more willing to give away a lot of stuff as long as it results in some benefits that they value.'"

Continues the times, "New companies including WeShop, Aprizi, Blippy and Dopplr are trying to exploit the data that people seem so willing to give up. Some are even allowing shoppers to set what terms they want — free shipping, half-price discounts, only fair-trade products. They can also list what they are shopping for, like a gray cashmere sweater under $100, for instance, and let the retailers fight it out for the right to make a sale.

“'The whole privacy debate has grown up around people using your data without your permission,' said Antony Lee, chief executive of WeShop. “If you want to use your data to your benefit, that’s for you to do,' Mr. Lee said.

"While data on Mint is kept private — there is no way to share financial details with other users — WeShop has built a system that allows people to spread information about their shopping habits. After a consumer gives WeShop access to an e-mail account, the system scans e-mail headers to find electronic receipts, then extracts what someone bought and what price they paid.

"All that information is posted to the WeShop site as a kind of in-depth shopping history. A consumer can keep it private, or share some or all purchase data with other people in WeShop networks (using a nickname). That lets users compare prices and post messages about what Lego sets or prom dresses they are considering.

"WeShop will soon give retailers access to the data and allow them to send specific offers. A retailer like Bluefly, which says it plans to test WeShop, could search for people who have bought something prom-related, and send those users e-mail messages with special offers on formal dresses. Retailers pay WeShop a percentage of the sale price when a consumer buys a product.

“'Everyone’s kind of working on different angles of how we give the consumer more ways to target what they want, to ask for what they want, and get it,' said Bradford Matson, chief marketing officer of 'This notion of how people shop is changing very quickly.'

"Bun Lai, a chef at Miya’s Sushi in New Haven, said he liked the way WeShop put him in charge. 'I wasn’t completely comfortable right from the start — it’s after I understood that you actually have control of the information that you’re going to allow the network to have, then I realized it was actually something more empowering,'" the New York Times quotes him as saying.

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