The fine balance between personalisation and privacy
by Nompumelelo Mokou. Balancing consumer demand for privacy with retail and brand customer experience.Monday, 12 Apr 2021
by Nompumelelo Mokou. As I have discussed in a previous article on Retailing Africa, consumer data gathered both in-store and online is becoming more and more crucial for retailers looking to offer their customers the ultimate personalised experience. At the same time, customers are demanding more and more personalisation. And more research (particularly from the USA), shows there is a growing concern from individuals on just how their data is gathered, stored, and used. This can have reputational impact on retailers in particular. Government regulators are also joining the call for more stringent controls on data gathering and distribution.
In this context it is important to differentiate between two kinds of data gathering. The first is the ‘gathering’ of bank details, credit card numbers or ID numbers to perpetrate a fraud or theft. The second is that social media companies use data to manipulate consumer behaviour in the name of personalisation. The first is a security issue; while the second has to do with privacy. This article will focus on this second component while acknowledging the importance of the first.
We live in the era of what academic and author Shoshana Zuboff calls Surveillance Capitalism. In South Africa, in a population of more than 58 million, 36 million are internet users, 22 million of whom are active social media users. We live our lives online and for the most part this means in public. Our personal data is gathered, brokered, and used to serve targeted advertisements or personalised CX. Many of us do not know how this data is gathered or how it is used; and once we have ticked the Ts & Cs and given consent, we have lost control of the process. I read somewhere recently that some T&C’s are as long as a Shakespeare play.
Facebook, Google, Apple and Amazon and other giants of social media and the digital economy have created business models that are centred around the offering of a “free” service in return for personal information. Individuals are not considered consumers but rather seen sources of data. Recently Tim Cook, Apple CEO, suggested, without naming names, that Facebook’s business model “… is built on misleading users, on data exploitation, on choices that are no choices at all, it does not deserve our praise. It deserves reform.” While this comment is part of a broader struggle between tech giants for control of us lowly consumers, it did make an important point.
Big Tech argue that all this data is gathered to offer you, the individual, relevant and personalised information you need. In reality, this information gathered from online behaviour provides a stream of data to anyone who wants it. The Cambridge Analytica case illustrates this point.
CX vs privacy
All consumers today expect true personalisation and a unique customer experience; but they also want to control their data. This is a contradiction for the consumer and a challenge for the social media giants, as well as retailers. This fight over data will impact personalisation at the consumer level and it will impact their overall business models where gathering and using consumer data is the key to profit. This debate over data ownership and usage may become moot as stronger regulation is introduced and heftier fines and sanctions are imposed. The current benchmark for online data regulation is the General Data Protection Regulation (GDPR) introduced by the European Union (EU). The fundamental basis of GDPR is stated in Recital 7: “Natural persons should have control of their own personal data”.
Many components of the South African Protection of Private Information Act (POPIA) are based on the GDPR. Already the SA regulator has stepped into the discussion about changes to WhatsApp’s conditions of service. “WhatsApp cannot, without obtaining prior authorisation from the IR process, use any contact information of its users for a purpose other than the one for which the number was specifically intended at collection, with the aim of linking that information jointly with information processed by other Facebook companies,” the regulator said. WhatsApp is owned by Facebook.
Regulators have an important role to play, and individuals can take steps to protect themselves at some level by changing their browsers, using encryption and ad-blockers. I think though that IT companies and software developers working in the retail and CX space must play a role in protecting consumers while enhancing their retail journey.
These companies should be adopting a more proactive consumer-centric approach to the managing of data in the overall CX experience. A major step is to break down organisational silos so that marketers, IT teams, software developers, the CX professionals and legal team dealing with compliance are all reading from the same hymn sheet in terms of responding to consumer demands and expectations when it comes to data usage, gathering and retention. The IDC FutureScape: Worldwide Chief Marketing Officer 2021 Predictions, state that by 2023, 20% of brand equity will be tied to privacy and trust policies, adopted by enterprises as part of CX efforts.
Writing for The Content Advisory, Tim Walters Ph.D., says that a consumer centric approach to CX and data should offer four things:
- Providing transparent information.
- Enabling active agreement and granular choice.
- Allowing consumers to directly manage their data.
- Keeping personal data safe.
The fourth bullet refers to data security that I touched on briefly earlier. It is logical to expect that once you give consent for your data to be used by whichever company or entity, that it will be kept safe and secure.
As the regulatory environment places more and more demands on retailers in terms of the gathering and retention of customer data, an opportunity exists for software companies to develop CRM solutions that allow retailers to offer the right balance between CX, privacy, security and personalisation.
Main image credit: Unsplash.com.
Nompumelelo Mokou, Executive: Intelligent Customer Experience, Dimension Data. Mokou is a Chartered Accountant by profession but has always been known for her love for business. She joined Dimension Data in 2016 and is constantly inspired and challenged by imminent change. She believes that greatness is not achieved alone but through multi-faceted people, expertise, contributions and opinions. This is what makes teams work. Her core philosophies by which she lives her life are to have faith and courage in all seasons and to never be afraid of challenges, no matter the size or complexity.
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