Coffee for data? Yes, possible! New “Pay with Data” System! If you’re a person that feels ok about giving up some of your personal data in exchange for a coffee (and not paying anything), Japan coffee chain Shiru Cafe is the right for you.
This coffee chain has 21 stores, based in Japan and India predominantly, while having its branch now also in the U.S. (Providence, Rhode Island). This chain came up with an idea that any student or faculty member can provide his personal data including the name, date of birth and work experience through an online registration process. Now, the company is planning to expand further within the United States to get even more customers.
Shiru has based its business model on the collection and treatment of personal data as a currency for an exchange of goods. They generate their profit from different sponsors, advertising on their website, interested in potential clients who they acquire through certain events.
In case of Shiru cafe, the sponsors are e.g. Nissan, Microsoft or JPMorgan. This new approach leaves the previous tracking of purchase behaviour and turns to wilful acts of the clients. However, the company informed that it doesn’t share personal information of its customers with third-party companies.
According to Keith Maher, Shiru’s North America general manager, the objective of the company is to „help students make the transition [from academic life to the workplace] easier and empower them to make better decisions.“
Marketer’s appreciated this new “pay with data” business model, hoping that it could help to reveal a new path for the communication with customers. Nevertheless, there are also risks related thereto, in particular due to the privacy, so much discussed lately in connection with Facebook.
The main issue for retailers or financial sector was to achieve as much personalisation of offers as possible. We could see different loyalty programs or branded credit cards, trying to focus on certain habits of their customers. In principle, customer like when brands are transparent about what they offer in return for the data acquired from them and how their data is being used. In such cases, customers are likely to share more personal information.
Now, the issue has a legal point of view as well. The so much discussed E.U.’s General Data Protection Regulation (GDPR) requires companies to request customer consent in case of provision of their data to third parties even before collecting and using such personal data. Now, the company is intending to get into the UK market, paying increased attention to the requirements of the GDPR.
However, Shiru has also informed about its intention to expand to Harvard, Yale, Princeton and Amherst before the end of 2018.