Who Do You Trust to Track Your Shampoo Consumption?

Future markets, Human insight, Innovation, Purpose

The Role of Purpose in AI and Big Data

Hopes are high as we enter a new, artificially intelligent, era. Machine learning is expected to improve human existence as smart systems’ abilities to predict our needs grow exponentially. From better batteries to high-speed Internet enabled cloud services, the scene is set for a utopian future of ultimate convenience. Surprisingly, the main obstacle is something as human as trust.

Being a consumer today increasingly involves trading benefits for personal information rather than money. This makes trust a more important factor in the customer relationship when it comes to sharing personal data. According to Center on Global Brand Leadership, trust strongly influence the level at which consumers are willing to share their data, with as many as 81% stating that they are more willing to share data to a brand they trust.

Fundamental needs for privacy are however amplified by frequent media storms reporting companies’ misuse of data. This has led most people to accept and even appreciate regulations that limit companies’ ability to record and store their personal information. The regulations are growing in number. Most of them are designed to protect us: an understandable intention given the many recent examples of how companies have misused personal data.

According to the same study, 86% of the respondents want to exercise greater control over the data companies hold about them and 59% have taken steps to limit companies from tracking and advertising to them. What is even more noteworthy is that 34% have provided made-up personal details to avoid giving away personal information.

As a result, the development of new products and services is slowed. Regulations and lack of trust create a consumer behaviour that set a new, slower pace for progress. Our better, more convenient, lifestyles will have to wait as companies struggle to navigate through grey areas of regulation.

We can already see how privacy settings are moving from fine print to easily accessible, one-click choice settings. Companies will increasingly need to motivate consumers to share their personal data. Lack of trust is keeping the perceived value of personalization from matching up with the perceived cost of sharing information.

Missing out on tomorrow?

My phone wakes me up at exactly eight hours and twelve minutes after I last touched it. On average, I need eight hours and three minutes of rest. The System can easily calculate the right time to wake me by adding that to the eight minutes it normally takes me to fall asleep.

The car will be here forty-nine minutes after the alarm rings. That is the time my normal morning routine takes. There is no yoghurt in the fridge, so I collect the tub that was recently left outside my door. Next to it is a pack of shampoo, of which the System has correctly recognised was running low.

In the car, I think about the fact that I have not set the alarm, arranged transportation, or purchased toiletries for almost two years. My mind then wanders to more important things, and I glance inside the paper bag on the seat next to me. Looks like I am having pumpkin ravioli for lunch today – just what I was hoping for.

This life could technically be yours tomorrow. A company that stores and analyses your purchase data could offer automatized delivery at a personalized quantity and frequency already today. It could even predict what days you have a craving for pasta. If you allow it access to your microphone and location information, it could guess when you are sleeping, showering, or typing on your computer at work.

The Happy Never-ending Story of Data

With varying degrees of excitement and fear, we are waiting for artificial intelligence to change our lives. Better personalization has already caused subscription-based consumption to increase. Companies wanting to build intimate and profitable relationships and stressed-out consumers alike are driving the development.

In the short term, the opportunity will be most significant for brands in categories with high repeat, low involvement purchases. Once household essentials come to people, the number of times people come to the store will likely decrease. As a result, so will the number of spontaneous purchases and new trials that come home with them.

Personalization will be a key component of many future offerings. More data is the basis for better analytics. Better analytics is the basis for good products and services. Good products and services are likely to be used more, and by more people, which creates more data. More data is the basis for better analytics…

The Missing Exchange Rate

People trade personal data for access to better, more personalized, products and services. Personal data is the currency with which we “pay” for our Facebook and Instagram memberships. That is a lot of value that we get for a low fee, if not for free. However, there is a sense that we are forced to compromise between privacy and convenience. This conflict arises because there is not a clear exchange currency that can determine the value of the transaction.

The Importance of Trust, Learned the Hard Way

Today, many do not trust companies’ motivations and abilities to keep data to themselves. Companies are learning about the risks associated with the un-ethical and non-transparent handling of information from the Facebook-Cambridge Analytica scandal and others like it. Results from Edelman’s Trust Barometer show that trust in platforms has decreased in twenty-one of twenty-eight countries over the last year. This together with new legislation is forcing companies to put the power of personal data back into people’s hands.

Trust positively affects buying behaviour. It is also a key factor in getting people to share personal information.

Consistent quality has been the main trust building block for as long as people and companies have exchanged benefits for money. Now we are trading information about ourselves (sometimes as intimate as how much shampoo I go through in a month). As a result, more emphasis will be placed on what the company will do with the information.

Motives Matter

What information am I willing to share about myself with a company in exchange for never having to purchase shampoo again? For many that depends on what the data will be used for. Organize timely deliveries of shampoo? Yes, please. Sell to pharmaceutical companies marketing supplements to promote hair growth? No, thank you.

Perceived greed is a key driver of distrust. Results from Edelman’s report show that 60 percent of respondents believe that “CEOs are driven more by greed than a desire to make a positive difference in the world”.

People can be less likely to share personal data with companies when they think it will solely be used for targeted advertising and other, greedy purposes. Who would you rather share your location with: Patagonia or Philip Morris? The World Health Organisation or CybAero?

The Power of Purpose

People are increasingly looking to companies to contribute to a positive development for society. 56 percent of respondents in Edelman’s study agree that “Companies that only think about themselves and their profits are bound to fail”. Several studies, including Lynxeye’s Brands of Tomorrow, support the relationship between perceived brand purpose and brand preference.

Brand purpose defines the company’s commitment to contribute to more than its shareholders’ wealth. It builds trust by increasing transparency and deter associations with greed.

Lynxeye’s Purposeful Brands study measures and ranks consumer perception of large companies’ purposefulness. We define brand purpose as “An honest intention to lead positive change”. When done right, brand purpose can make people believe that the company’s motives line up with their own. Because Patagonia has consistently proven their commitment to protecting the environment, many do not associate their high revenue (estimated at over $200 million in 2017) with greed.

The Role of Brand Purpose in Building Trust

While some will continue to look to governments and law makers to regulate the market, it is becoming more apparent that trust can be the quickest game changer. Brand purpose can create more equitable exchanges of value. It is a logical extension that people will feel more comfortable trading their information for more convenient, personalized products and services with a company whose intentions and purpose align with my own.

In this brave new world of convenience and personalisation, a successfully executed brand purpose can be the game changing differentiator that rapidly leads to major competitive advantages.

It provides the foundation for an authentic and relevant brand positioning. Moreover, it can build the trust needed to motivate consumers to share personal information that can drive development of better, more personalized products and services that ensure we build a tomorrow that reflects our shared values and not just the motive of profit at any cost.


Words by Emma Barrebo, Senior Consultant, Singapore