Throughout the pandemic, online commerce has been a key lifeline for both brands and consumers. The disruption of Covid-19 forced a new wave of shoppers, previously considered less tech-savvy, pivot online to maintain continuity – brands and retailers have therefore been eager to nurture loyalty and ensure a consumer return to their platforms.
The concept of brand loyalty is heavily reliant on trust between a buyer and the brand, and any slip could be extremely harmful for the retailer involved. Now is a dangerous time for brands to be risking their relationship with customers, particularly with the Golden Quarter in full swing – as Klarna discovered with its recent blunder regarding its use of consumer data.
It’s there in the small print
Most consumers are now familiar with Klarna as a buy-now-pay-later app and payment option. However, it is also a regular online payments provider, in a similar way that we might use Visa checkout or PayPal. Most consumers don’t take a lot of notice checking which provider hosts the checkout or payment page. We just input a few details, click a few boxes, and pay, without knowing that our data may be shared with the payment provider – as happened in this case with Klarna.
It’s there in the small print. You’ll notice on these checkout pages, “By clicking “Buy Now” I confirm that I have read Klarna’s Privacy Notice and Cookie Notice….” So, even though the consumer is not using the renowned Klarna ‘Pay in 30 Days’ option, they are still agreeing to share their information with Klarna, but probably without really knowing it.
It’s also possible that platforms such as Klarna are integrated within certain areas of a retailer’s website that consumers are possibly not aware of, gaining important user behavioral data.
The importance of clarity
In this instance, we’re talking about the clarity and control in what we share with brands and third parties. Clear opt-in and opt-out capabilities and terms give users control. Providing flexibility in their settings, choices about their workflow, options around their data and absolute transparency allows customers to feel authentic engagement and build trust.
Although the tick box option protects retailers legally, this kind of user experience can feel a little manipulative, prioritizing sharing personal data with a third party, as opposed to prioritizing a clear, quality user experience.
A slip such as this can completely undermine that consumer trust element, and make us question those other elements of trust, which, in today’s ‘cancel culture’, can be extremely damaging.
How does Klarna operate?
Klarna didn’t do anything wrong. It provides its payment platform to retailers, and it’s fundamentally down to the retailer how it communicates to customers at the front end.
In fact, part of Klarna’s model is an analytics practice. Klarna applies wide-ranging analytics to many eCommerce sites, with the aim of improving the user experience for consumers. This often means tracking user behavior across different stages of the buying journey, not just the checkout as we might assume, but it’s these learnings that provide us with better, faster, more personalized buying experiences.
This kind of practice allows a website to recognize a user’s device, and helps make websites work more efficiently, easily navigate between pages, remember preferences, and improve the overall experience, such as ensuring the adverts and content a consumer sees online are more relevant to their interests.
How do we use consumer data in eCommerce?
There are ways data can be carried with you, particularly on mobile. For example, if you remain logged in to a site, or don’t fully close the browser down – which is common when we use mobile – the site will be disclosing information on other visits, possibly even to partner or parent sites.
Another example is when a consumer is buying from a smaller brand of a large consumer goods company, perhaps some condiments, snacks or coffee, they’re probably not aware that their personal data could be put in a wider data pool with other sub-brands. Sooner or later, the same consumer might find they’re seeing targeted ads or emails for razors, shampoo or beauty products, without ever buying from these brands. Or, if you buy from online from a large supermarket, your data may be shared with other business functions – its mobile phone network, its bank, its insurance service for example.
A trade-off for convenience
For consumers, we balance what we’re prepared to share, with the convenience of a quick buying experience. And we’re often more likely to make this kind of compromise on mobile, where speed and convenience are major factors of why we use mobile to make purchases.
A good example of this is using the option of signing in with existing accounts – Facebook, Twitter, Apple or Google for example – when buying online. This feature is commonly used on mobile, with trusted and regularly used apps, to provide a faster, simpler and more convenient way to log in to retailer websites without having to create and remember countless different usernames and passwords.
In return, these apps – such as Facebook – share your public profile, such as your name and profile picture, email, phone number. But, where possible, many sites are trying to dig a little deeper than that.
For example, TripAdvisor might try and use your location history and activity to track where you have travelled and any reviews you have given.
For eCommerce sites, a similar practice could be applied to learn about visitors’ interests and preferences, enabling brands to provide a much better experience such as recommend products or offering suggestions based on their favorite activities.
Building trust in eCommerce
Trust in eCommerce depends on a variety of factors, and one slip could have serious reputational repercussions. There are a countless factors consumers consider when shopping online, all of which brands must consider to provide a seamless experience. These include the quality of the products, the range of fulfilment options, customer service, loyalty rewards and more.
As retail footfall remains low with the second lockdown, the online and post-purchase experiences have become key differentiators for success. Driving growth in the new retail landscape requires brands to incorporate the right digital strategies to meet the needs of their customers.
Richard Mathias, Director, Platform Services, LiveArea EMEA