New York:
Sites are pushing to see how much information people will turn over
These efforts are predicated on a shift in the relationship between consumer and company. Influenced by a willingness to trade data, sites are pushing to see how much information people will turn over
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As concern increase in Washington about the amount of private data online, and as big sites like Facebook draw criticism that they collect consumers' information in a stealthy manner, many web start-ups are pursuing a more reciprocal approach - saying, in essence: give us your data and get something in return.
The budgeting website Mint.com displays discount offers from cable companies or banks to users who reveal their personal financial data, including bank and credit card information.
The clothing retailer Bluefly could send offers for sunglasses to consumers who disclose that they bought a swimsuit. Location-based a services like Foursquare and Gowalla ask users to volunteer their location in return for rewards like discounts on Pepsi drinks or bucks coffee.
These early efforts are predicated on a shift in the relationship between consumer and company. Influenced by consumers' willingness to trade data online, the sites are pushing to see how much information people will turn over.
"People are a lot more willing to give away a lot of stuff as long as it results in some benefits that they value,' said Stephen J Hoch, a marketing professor and director of the Jay H Baker Retailing Initiative at the University of Pennsylvania's Wharton School.
New companies, including WeShop, Aprizi, Blippy and Dopplr, are trying to exploit the data that people seem so willing to give up. Some are even allowing shoppers to set what terms they want - free shipping, halfprice discounts, only fair-trade products. They can also list what they are shopping for, like a gray cashmere sweater under $100, for instance, and let the retailers fight it out for the right to make a sale.
"The whole privacy debate has grown up around people using your data without your permission," said Antony Lee, chief executive of WeShop. "If you want to use your data to your benefit, that's for you to do," Lee said.
Daniel Sjoberg, a 26-year-old in Manhattan, signed up for Mint as he was completing graduate school in biostatistics last summer. He allowed the site to pull information from his checking account, his credit card and his student loan account.
He meant to use Mint as a budgeting tool, but soon began browsing through offers Mint listed under 'ways to save'. He signed up for a Charles Schwab checking account when he learned it would refund his ATM fees, and an Ally savings account based on the interest rate.
Sponsors are allowed to include their logo and a link to their site, and they pay a referral fee if a consumers signs up, but offers from nonsponsors are listed, too. Sjoberg said he particularly liked how transparent Mint seemed to be.
"They put that very clearly for you to see -'We think Ally is good for you, and by the way, they're endorsing us'." Sjoberg said. " It's refershing to have it out in the open who's giving them money and who's not giving them money."
Aaron Patzer (pictured above), who founded Mint in 2007 (the company was acquired by Intuit in 2009 for $170 million), Believed that users would give the site private information in return for allowing Mint to analyse their finances to alert them when they had exceeded their budget, or to send them offers from cable companies or banks.
"Most venture capitalists, when I was starting this company, said that no one would trust a start-up with their financial information," said Patzer, now vice-president and general manager of Intuit's personal finance group. "In essence, we would data-mine your own data in order to help you."
While data on Mint is Kept private - There is no way to share finance details with others users_ WeShop has built a system that allows people to spread information about their shopping habits. After a consumers gives WeShop access to an e-mail account, the system scans e-mail headers to find electronic receipts, then extracts what someone bought and what price they paid.
All that information is posted to the WeShop sites as a kind of in-depth shopping history. A consumers can keep it private, or share some or all purchase data with other people in WeShop networks (using a nickname). That lets users compare about what Lego sets or prom dresses they are considering.
WeShop will give retailers access to data and allow them to send specific offers. A retailer like Bluefly, which says it plans to test WeShop, could search for people who have bought something prom-related, and send those users e-mail messages with specials offers on formal dresses. Retailers pay WeShop a percentage of the sale price when a consumers buys a product.
"Everyone's kind of working on different angles of how we give the consumers more ways to targets what they want, to ask for what they want, to ask for what they want, and get it," said Bradford Matson, cheif marketing officer of Bluefly.com. "This notion of how people shop is changing very quickly."
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