Making Shopper Data Privacy & Protection a Retailing Priority


Anna Johansson
Guest Contributor

Collecting and utilizing shopper data can help you gain an edge over your competition, but if you want your brand reputation to emerge unscathed, you also need to proactively address the data concerns of your shoppers.

Data has already taken over the retail industry, and it’s only going to grow more important in the future. Depending on the size of your operation and your goals, you might collect customer data through a customer loyalty program, or you might keep tabs on foot traffic through your physical establishment. You probably also have an in-depth inventory management process, and dozens of other data-related applications that keep your business running.

Customer-related data, including purchase histories and preferences, is an extremely promising opportunity. If you can learn more about your customers, you can customize their experiences, offer more of the products they want the most, and improve customer loyalty tremendously. But to do this successfully, you’ll also need to think about data privacy.

Why Data Privacy and Data Protection Matter

Data privacy and data security are massive fields, and if you’re gathering data on your customers, you’ll need to take them seriously.

For example, if you’re storing information on consumers, like how often they buy a certain product or what their shopping habits are like, that information could be stolen by a third party. If that third party has nefarious intentions, they could use the consumer data to advance their own interests, potentially exploiting your customers in the process. They could also sell the data further down the chain; unscrupulous advertisers could use it to berate your customers with ads, or in some cases, criminals could use it to steal from your customers directly. Encrypting your files can protect them from being stolen, as can following best practices for data security, but some customers are going to be uncomfortable with your company having this data in the first place.

Customers also need to feel a sense of trust with your business. Leveraging consumer data to make custom recommendations, for example, is an effective way to guide consumers to the products they’re most likely to enjoy—but it might also be seen as creepy. If customers feel their information is being gathered without their consent, or if they feel it’s being used in a questionable way, they could opt to shop with another brand.

Do Customers Really Care?

Of course, we also need to consider the complexities of whether consumers truly care about their data privacy. Most of us would claim on a survey that we care about how our data is being gathered and how it’s being used, but at the same time, we’ll quickly scroll to the bottom of any terms of service agreement so we can agree to it as quickly as possible. Similarly, the public tends to react harshly to reported data breaches (like those recently faced by Marriott and Equifax), while being relatively complacent with data harvesting practices that don’t arouse suspicion.

Knowing this, security and transparency should be your top priorities. The safer you keep your customer data, the less they’ll have to worry about it. At the same time, the more upfront you are about your data privacy policies and how you collect and use data, the better customers will understand it—and the less surprised they’ll be when they encounter a personalized advertisement.

Steps You Can Take

Retail customers do care about their data privacy and security, so it’s your job to make sure those concerns are being addressed. These are some of the steps you can take:

  • Do a thorough review of your security measures (and improve them). First, conduct an audit of your security practices. If your retail brand ever suffers a significant data breach, it may be difficult to ever fully recover from the damage to your brand’s reputation. Make sure you’re collecting and storing data in a way that’s practically impregnable, and educate all your staff members on best practices to avoid falling for schemes or creating points of vulnerability internally.
  • Make sure customers understand your data privacy policies. Take the time to educate your customers on exactly how you’re collecting and using their data. An extensive terms and conditions document, packed with legal jargon, isn’t going to be easy to understand. Put things in simple language and work to be as transparent as possible.
  • Give customers more options. Customers feel more secure when they’re given more control. One of the easiest ways to give them that control is to give them more options for how their data is collected and handled.

If you want to stand out as a retail brand in 2019 and beyond, you need to be on top of your data management game. Collecting and harnessing more retail consumer data can help you get the edge over your competition, but if you want your brand reputation to emerge unscathed, you also need to address the data concerns your retail customers have, and as proactively as possible.

About the writer: Anna Johansson is a freelance writer, researcher, and business consultant. A columnist for Entrepreneur.comForbes.com and more, Anna specializes in entrepreneurship, technology, and social media trends. Follow her on Twitter @Number1AnnaJo and LinkedIn.

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