By Daniel Hunter
Consumer businesses have not recognised the implications of the government’s Midata initiative and risk losing customers unless they can better demonstrate transparent and responsible use of data, says business advisory firm Deloitte.
A new report from Deloitte shows that 31% of consumers are happy to share data with brands they like, while 10% would share more personal information in return for access to their own shopping history. 26% would do likewise in return for a financial discount, such as 10% off their next shop, and 13% would share more data if they received less, but more relevant marketing material.
Although these are relatively small proportions, we anticipate sharp increases should such policies become established. However, consumer businesses have a lot of work to do to gain the full trust of their customers. At present, just 26% of consumers are confident that companies keep their data securely. 66% don’t know what personal information companies hold about them, and 60% are concerned that companies can access their internet browsing data.
Jason Gordon, retail partner at Deloitte, said: “Consumers will remain sceptical about the storage and use of personal data until businesses clearly demonstrate how they are using it for their customers’ benefit. Certain uses of data, such as personalised pricing where some customers are charged more than others for the same product, risk creating a culture of mistrust. Trust is key. Gather data in an appropriate manner and use it sensibly and responsibly and consumers will be prepared to share more data.
“The government’s Midata initiative will force companies to address this issue since it will make it compulsory for brands to give consumers access to the data they hold on them. But irrespective of any regulatory change, businesses that adopt a more open and transparent approach and which help their customers understand what data is held about them will improve their reputation in the eyes of consumers and gain a competitive advantage.”
The depth and volume of data generated by and about the consumer is staggering. 76% of consumers say they have at least one supermarket store loyalty card, with 55% having at least one loyalty card from other, non-grocery stores. 70% say they have at least one online shopping account, 59% use at least one social network and 52% have registered their details online to receive information from companies about their products or services.
Ben Perkins, consumer business research director at Deloitte, said: “The rise in customer data will renew the debate about privacy and the responsibilities of government and business. Sharing data with consumers to help them understand their shopping patterns and make better choices should result in consumers consenting to share more data. Consumer businesses should strive for an approach built around trust and mutual benefit
“Doing so will require a cultural shift in the way organisations think. Some businesses have fallen into bad habits because technology and data has reduced the relationship with customers to a series of electronic transactions, whereas developing these relationships with customers will require companies to find the human touch.
“If they can do this, the opportunity is significant. Predictive analytics makes it possible to anticipate consumers’ actions, enabling businesses to offer their customers what they want, when and how they want it — and do so ahead of competitors.”
Gordon concluded: “Just because you have someone’s data, doesn’t mean you have to use it. Success lies in the insight derived from data, not in the data itself. Companies need to be crystal clear about the data they need, how they intend to use it and then communicate openly about this with their customers.”
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