In the digital age of commerce, only one currency has worth – trust.
The information being tracked, analysed and shared by businesses is now at the forefront of consumers’ minds. While the act of actually sharing information is accepted as being essential to the purchasing process, consumers will only divulge that information to who they deem as trustworthy.
As revealed in the PwC Global Online survey, 86% of consumers say their primary reason for shopping with a c company is that they trust the brand.
But at the same time, many are wary. Of those who chose not to purchase items online, 43% said they were worried about the security of their personal data, up from the 41% recorded in 2012.
More businesses will aim to improve trustworthiness by offering themselves as a useful tool. As more use big data and other information to target customers in a more personal way, marketing techniques which create value for the user will build trustworthy relationships.
This is all focused on adaptive retailing. In traditional retail, online and physical channels almost sat in competition with each other. Adaptive retailing involves taking all parts of the retail business – including information – and uses that to deliver services which are intuitive and responsive, across a range of channels.
The new, updated privacy laws
New privacy regulations introduced today will have a substantial effect on the way businesses aggregate and use data – they are the biggest changes in 25 years. All businesses with turnover of more than $3 million a year which collect personal information will need to update their principles to reflect the changes.
Many are substantial. The definition of personal information has been extended to account for information which is collected anonymously, and, when used with other information, will have the ability to identify individuals.
Businesses must also be able to notify individuals when information has been stored, how that information is used and where it is stored. Consumers also have more control over their ability to opt-out of certain communications.
Not only do businesses need to include an opt-out mechanism, but a centre where users are able to opt-out of other communications must be offered.
Changes to responsibility in the event of a breach have also shifted to the business in question when that breach is located overseas.
These obligations must be taken seriously if organisations hope to compete and succeed in this new world. While the possibilities of using data to personalise experiences and create adaptive marketing solutions are endless, care must be taken.
These improved privacy standards are raising the bar for what consumers will expect – and breaking their trust will have disastrous ramifications.
Suffering the consequences
The consequences of not maintaining strict data standards worsen every year. Cyber attacks are no longer targeting the biggest organisations, but businesses of all sizes – thanks to the personal data being collected by most.
The fallout of successful attacks is costly. In December 2013, department store giant Target suffered a breach which affected tens of millions of customers and halved the company’s holiday profit – with a clean-up bill of $US68 million.
Information including names, addresses, phone numbers and credit card numbers were lost. Last week, the company’s Chief Information Officer, Beth Jacob, announced she would step down effective immediately due to the fallout from the attack.
In 2011, Sony suffered a similar attack when the personal details of approximately 77 million accounts were stolen – one of the largest breaches in history at the time. The total cost of the breach was $US171 million.
Nieman Marcus suffered a similar setback when 1.1 million customers were affected by a hack during 2013. The firm only became aware of the incident in January 2014 when it was contacted about fraudulent activity on some credit cards.
While these attacks have occurred so often it has become almost expected large businesses will suffer one sooner than later, the fallout is not inevitable. Businesses have the opportunity to avoid ever being caught up in a security breakdown by not only just following privacy regulations, but exceeding them.
There is more than just a bad reputation at stake. For consumers, trust is everything – breaking it by succumbing to a hacking attack could spell disaster. Robust, sophisticated protection mechanisms are required for success.