Talking about data strategy in the age of privacy concerns is challenging. But for Facebook’s retail executives, the timing this week couldn’t be worse.
The furor over Facebook’s involvement in the scandal over Cambridge Analytica’s use of its data during the 2016 U.S. presidential election broke just before company representatives arrived at the 2018 Shoptalk conference to evangelize their newest personalization tools for advertisers — which rely on user interests and shopping behaviors.
News of the scandal caused Facebook’s shares to plunge, wiping out nearly $50 billion in market value. Now investors are suing the company, claiming its failure to safeguard privacy cost them money, and politicians and regulators on both sides of the Atlantic are demanding that Facebook explain itself — and perhaps face further restrictions. But as chief executive officer Mark Zuckerberg and other senior Facebook executives remain silent on the matter, at least so far, his retail team is charged with carrying on, talking shop in Las Vegas.
It’s a tricky balance. There’s an art to showing excitement for new data-driven features now without coming off as tone-deaf.
Eva Press, group lead of Facebook’s U.S. sales for retail and consumer packaged goods, addressed data privacy head-on: “I think the clear message that we want everyone to understand is that we take our responsibility for people’s information incredibly seriously,” she said. “And that is the focus of everything we’re doing, including letting people control their own information.” The company’s new Store Sales Optimization tool, which gives bricks-and-mortar retailers the ability to access Facebook’s machine learning technology, allows shoppers to opt out if they’d rather not participate.
“Obviously trust is at the center of everything we do and comes above everything else,” said another company spokeswoman, echoing sentiments in Facebook’s press release about Cambridge Analytica. As for the optimization tool, it was built with privacy in mind, the company claimed. Facebook also legally requires advertisers to obtain permission from customers, such as acceptance of terms of service, before they hand over offline conversion information. And it pledges not to share names, contact information or identifying information about individuals with advertisers.
Clearly, Facebook is taking pains to emphasize privacy. In this climate, it could do no less — especially since the sentiment rides alongside new data tools that, the executives said, offer stores some major benefits. High on the list for physical retailers is a new ability to tap into the advanced machine learning that only a tech juggernaut like Facebook could offer. Cue enthusiasm.
“Store Sales Optimization is a game-changer,” said Simon Whitcombe, vice president of global marketing solutions. His team works on the e-commerce side with tools like Facebook pixel, a bit of code placed on web sites that can track conversions from Facebook ads. “The partners we work with have enjoyed the benefit of the Facebook pixel for many years now. By understanding the people who are converting on those web sites, we’re able to build machine learning to understand those people and find more of them, and help drive the acquisition of high-value customers that come back again and again.”
The latest in-store optimization tool, he explained, now brings that opportunity into the offline world.
“What I think is so exciting, as we think about innovation,” added Press, “is that this is the first time that those traditional bricks-and-mortar store retailers are able to take advantage of all the goodness of the Facebook machine learning. The piece that they are getting, that we’re excited about, is the ability for us now to really optimize for someone who has the propensity to shop in a store.”
For Press, the need seems obvious: “The store isn’t going away. Ninety percent of sales are happening in a store,” she said. “By working with them, partnering with them, leveraging data — whether [point of sale] or [customer relationship management]…that they’ve gotten consent from their shoppers is a piece of it. But that then allows us to make a much better, more personalized experience.”
Whether people realize it or not, most are in a constant state of weighing technology’s risk versus reward or helpfulness. Another example is the voice assistant. According to Pew Research, although 46 percent of U.S. adults use one, as many as 27 percent don’t because of privacy concerns.
As features like personalization increasingly become cornerstones of retail, as well as technologies like artificial intelligence, the appetite for data only grows. But so, too, will the need for transparency and smart approaches to security and privacy. It’s a tough balance to strike, but it’s one that is crucial as more retailers lean into the data era.