When it comes to your customer data, no news is good news
By Guy Courtin, VP Industry and Solution Strategy at Infor Retail
Few folks who are in the middle of the technology world should have been surprised that Facebook data was being harvested to better target messaging in the 2016 United States presidential elections. First, what we’re discussing is the issue surrounding what Cambridge Analytica perpetrated through the usage of Facebook user data. Cambridge Analytica improperly harvested data from 50 million American accounts that Facebook had shared with the political market research firm. This created a tremendous backlash from users (some of whom even started the #DeleteFacebook movement), Facebook lost six percent of its valuation, and more importantly, this has raised the eyebrows of governments in the United States as well as in Europe—signaling a real crisis for the baby-faced Facebook founder, Mark Zuckerberg. So, what does all this have to do with retail?
The allure of Facebook was that it allowed users to connect and share parts of our lives with our friends and families. Granted, some of us may share too much! I know I know, I’m trying to be better about that. The business value for Facebook was, of course, the mountains of personal information we added to their databases on an hourly basis. Our friends, life events, pictures, and intimate details of our personal and professional lives all willfully handed over to the social media giant. How could any market research service not salivate at the possibilities all that data offered? Which is where this story’s arc intersects with modern retail. Retail today is constantly chasing to keep up with consumer demands and desires. What’s the main tool in this race? Data. Data about our consumers, data about our network, and data about our own businesses. This data is the fuel that is needed to power the algorithms that enable retailers to uncover new efficiencies to existing processes, but also hold the key to potentially discovering the answers to the biggest retail riddles.
So, what must retailers glean from this latest situation with Facebook?
- Data is the new oil … but with greater knowledge comes greater responsibility. While most retailers might acquire the mountains of data Facebook has and is collecting, many retailers still sit on a treasure trove of data (and they may not even know it). From buying patterns, browsing histories, financial records, and mailing addresses to name a few, retailers have a massive responsibility when it comes to the data they collect. Retailers and brands need to double their efforts when it comes to securing their customer data and making their policies rock solid. Of course, you want to leverage the data to better target your consumer or bring efficiencies to your supply chain. But you cannot be as lax as Facebook appeared to be, nor ignore a breach as the leaders at Facebook did.
- The answers are not contained in just the data. Yes, data is the new oil in today’s retail and business world, but it isn’t a magic bullet. Retailers need to continue to develop and leverage the mountains of data they have access to. However, they must recognize that they are still dealing with people, who have emotions, needs, and expectations. While we realize that we are always being marketed and messaged to based on information that’s readily available, retailers should not to go to the extreme with the data that they have. Yes, I want to be offered products and services that meet my needs, but I also want to ensure I am somewhat in control of that experience. And to avoid a Facebook – Cambridge Analytica situation, how a retailer comes up with that laser focused assortment must be transparent to the consumer. Consumers need to know how their data was used to get to such a personalized experience or assortment.
- Measure twice, cut once. We can all agree that data is key, but when retailers lean on this data they must measure it twice before they execute. With the constantly growing mountains of data, it can be easy for retailers to fall into the trap of believing the data will render all the answers. Data must be constantly coupled with human intuition and oversight. The data might tell you to develop the Edsel, but your wily veterans should know better.
We have experienced data breaches at scale in the recent past: Think Target credit card breach, the recent Equifax breach, or even the “dating site” Ashley Madison breach. These breaches all made the risk of giving up some of our private data to faceless firms much more real. Retailers see information on their users – and to some extent from their extended supply chain – as key to competing in today’s hyper-intense retail landscape. However, they cannot expect their consumers to blindly provide this data without clear checks and balances. If your biggest competitive advantage is data about your consumer, make sure you use it for good, and never take its security for granted.
The consumer is also watching you.
Learn more about the next generation of retail software at infor.com/retail
Tagged: big data, CX, data breach, Facebook, personalization, security