Why Amazon is OK and Google is not
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
From purely the consumer’s perspective, two events came up in the news lately that have led me to the conclusion that, in general, consumers think Amazon is okay and Google is not.
One involved the buzz of stories around "anticipatory shipping" Amazon’s patent — basically, using predictive analytics to anticipate consumer demand by pre-staging packed orders closer to where Amazon believes the demand will come from.
Some might argue that being able to deliver my pack of Sharpie markers the next day under my Prime subscription — simply because Amazon knows me well enough to know that in the next two weeks I have a high likelihood of ordering Sharpie markers — could border on "creepy." But somehow, Amazon received no blowback for this use of customer data. Why? Because it increases the convenience factor in ordering from them. They’re using my data to get me the things I want faster.
Contrast that with the general response to Google’s acquisition of Nest Labs, the maker of internet-connected smoke alarms and thermostats. Even though Nest immediately emphasized that its user data will only be used to improve Nest products, the user response appeared to be deep disquiet with the idea that Google just got access to data about when they’re home and when they’re not.
As a consumer, I share their concern. It’s disconcerting to think that a company that values data so highly now has access to a whole new level of data about me. Google already knows a hell of a lot about all of us, and if you have an Android phone, they know even more.
So why is Amazon okay and Google not? I think it’s because Amazon is using data to make my life as a customer more convenient. When they make my life more convenient, I tend to give them more of my business, and theoretically Amazon will make money from that.
Google offers services that are convenient — free Gmail, Google Docs, Google Drive, etc. — but in return they are making money by selling my data to literally the highest bidder. Maybe they are not explicitly selling my data, but using what they know about me to solicit advertising money from businesses trying to reach people like me. What’s missing from that equation is my vote in what I want to receive.
Is this merely a difference in perception? Maybe.
But for retailers watching the battle of these behemoths — and who’s winning the perception war and who is not — it’s worth noting that even though these two companies are basically doing the exact same thing for the exact same profit motives, for consumers, one is OK and the other is not.
Do you agree that Google is sparking more privacy concerns from consumers than Amazon? If so, what does the apparent difference say about the willingness of consumers to share their data? What lessons should retailers draw in seeking to tap shopper data?