Two Sides of the Identity Equation for Retailers
Retailers are strongly committed to leveraging innovative technology to create a meaningful experience for their customers — particularly as more customers interact with them digitally. Think about all of the companies that enable you to order items online and pick them up in-store, order food through mobile apps, and/or watch video via streaming services. These are all activities that retailers use to better recognize their audience. With many of these interactions garnered from disparate sources, retailers need to use advanced analytics to connect them together.
According to Experian’s 2020 Global Identity & Fraud Report, 86 percent of businesses, including retailers, consider advanced analytics, such as artificial intelligence and machine learning, to be a strategic priority, and 84 percent believe it to be a core strength.
The concept of identity is a central tenant to a retailer’s success, and many believe their use of advanced analytics and innovative technology enables them to accurately identify their customers. The report shows 95 percent of businesses claim to have high confidence in their ability to identify and re-recognize their customers at every interaction. Unfortunately, the report shows that 55 percent of customers still don’t feel recognized.
Why the disconnect?
People and businesses have different views of identity. For most retailers, identity is rooted in their ability to accurately identify customers and prospective customers to deliver relevant ads and messages. The thought process being that the more they understand about their customers, the more personalized experience they can provide. In an environment cluttered with marketing messages, retailers need to find a way to cut through the noise.
Consumers have a less commercial and more personal view of identity. Their viewpoint aligns closer to the idea that each person is a unique being and they value a sense of security and trust in relationships — not just a collection of behaviors that predicts their propensity to buy something.
While relevancy and personalization are core components to a retailer's success, businesses need to consider customer identities beyond personalized offers. Retailers also need to factor in how to use advanced analytics to recognize and re-recognize customers at any given interaction and make them feel secure.
Many consumers echo that sentiment. While consumers appreciate relevant digital experiences, they ultimately have a deeper need to feel their information is protected. Our report showed that 74 percent of consumers cite security as their top priority followed by convenience.
In order for retailers to maximize the value of commercial relationships, peoples’ safety and security need to be at the forefront. Retailers have made great strides at using advanced analytics to better understand their customers and deliver more relevant digital experiences, but they also need to demonstrate an ability to protect their customers’ information.
While many businesses consider advanced analytics to be a strategic priority and core strength, only 67 percent of businesses consider the use of advanced analytics to be important for fraud prevention, and only 57 percent for identifying customers. By adding the same analytical rigor to identifying and re-identifying customers, in a way that makes them feel recognized and secure, retailers can create an environment where their investment in personalization can flourish. The ability to quickly assess hundreds of identity components, some of which are more difficult for fraudsters to counterfeit, provides retailers an opportunity to recognize legitimate customers across every interaction.
The more quickly retailers and businesses across industries adopt more advanced fraud and identity management strategies, the better positioned they will be to recognize and re-recognize customers across the entire customer journey. That means an improved customer experience with more convenience.
Chris Ryan is senior fraud solutions consultant, North America, at Experian, a leading global information services company.
Related story: How to Protect Data Privacy and Build Customer Trust in the Digital World
Christopher Ryan is senior fraud solutions consultant, decision analytics, North America, at Experian. He delivers expertise that helps clients make the most from data, technology and investigative resources to combat and mitigate fraud risks across the industries that Experian serves. Ryan provides clients with strategies that reduce losses attributable to fraudulent activity. He has an impressive track record of stopping fraud in retail banking, auto lending, deposits, consumer and student lending sectors, and government identity proofing. Ryan is a subject matter expert in consumer identity verification, fraud scoring and knowledge-based authentication. His expertise is his ability to understand fraud issues and how they impact customer acquisition, customer management and collections. He routinely helps clients review workflow processes, analyze redundancies and identify opportunities for process improvements. Ryan recognizes the importance of products and services that limit fraud losses, balancing expense and the customer impact that can result from trying to prevent fraud.