Health monitoring data generated via wearable devices will support retailers in providing innovative personalised services to customers, says dunnhumby CIO Yael Cosset, provided retailers can navigate privacy challenges.

With a growing range of wearable devices available - from AppleWatch to smart wristbands such as Jawbone - the market is expected to swell significantly in coming years, with analysts IDC predicting that 112 million units will be shipped in 2018.

According to Cosset, whose company provides data analysis for Tesco’s ClubCard customer loyalty service, retailers will be able to tap into information recorded on wearable apps. This could include what people eat and how active they are, with retailers then tailoring their services towards customer needs at a much more granular level. This may mean integrating with third party apps and hardware, or developing their own systems in future.

“It is a massive opportunity, although it is probably going to take a while before we have enough critical mass on specific devices for the data to really be meaningful,” Cosset told ComputerworldUK at Oracle OpenWorld.

Despite the volumes of information that will be generated via wearable devices as adoption quickens, he does not believe that making sense of data will be the biggest challenge for companies.

“The interpretation of that data is probably not going to be that challenging. A Jawbone wristband, for example, will generate the same data from a structured perspective no matter who wears it,” he said.

“As long as you build the API to Jawbone you can use that data and interpret it.”

Cosset added: “Then you can start providing health and wellness related services back to the consumers who care about it, with recommendations on meals, or even package the meal for you and you just pick it up on the way home from the office.

“These are services that consumers are starting to ask for, and the data is extremely valuable in that context.”

Walgreens eyes customer wearables data

Cosset’s claim chime with recent comments made by Walgreens, with the US retail giant expecting that, as wearables devices proliferate, the development of more fitness and other related apps will provide it’s business with access to more customer data.

Speaking to ComputerworldUK recently, Joe Rago, senior mobile product manager at Walgreens, said: “Now that Apple and Google have programmes where they are collecting a bunch of different types of health activity data, there are going to be more and more apps that are built that are simply using what [data points] are in the phone already.”

He added: “I definitely think there is going to be a huge boost in apps within that market - which will only mean good things for our API programme. It is going to create a larger pool of developers that we can work with.”

Next section: Giving up your data - a fair exchange?

Giving up your data - a fair exchange?

A major challenge for retailer firms will be convincing customer to offer their data up to consumers, with many concerned over privacy, said Cosset.

With government data legislation to protect consumers likely to differ from country to country, as well as what is culturally acceptable in terms of access to data, large multinational retailers will have to take these rules and attitudes into account when launching services.

However, Cosset said that firms can take a number of steps to overcome such potential barriers. Most importantly this means providing clear information in any terms and conditions contracts as to how customer data will be used.

“Our philosophy is that as long as you are absolutely transparent with your consumers about the data you are capturing, what you do with the data and what value the consumer ultimately gets from that relationship, then I think you will be in the clear,” he said.

“This means articulating [data use terms] more than once in very large capital letters, as opposed to at the bottom of a 150 page document.”

But to really encourage customers to part with their data, retailers must offer customers something in return - such as more targeted services. If this is done correctly, consumers may become more willing to open their data up to companies.

“A trend in the next couple of years is going to be that, if I feel very comfortable with the relationship around my data, and I feel ‘rewarded’ fairly for that exchange, then I may actually bring you more data that you don’t currently have access to,” he said.

“If I care about my health, and I am using a JawBone wristband and you have my transaction history about what I buy and eat, I may say you have been very good at giving me health advice or diet recommendations. This could mean I am going to give you access to more of my digital data, whether I am creating data on Facebook, Twitter or wherever, and provide recommendations based on that.

“As long as the consumer agrees that they are getting fair value in return then I think organisations will not face too many problems.”

Picture: Flickr user mjtmall