GUEST COMMENT The economics of surveillance versus the economics of trust – views


Angel Maldonado, CEO and co-founder of Empathy

One of the cornerstones of building a consistent and enduring brand is trust. In a world where personal data is being obtained at an alarming rate and consumer patience is running out, digital footprints and data privacy are now something all retailers must commit to.

According to a report published by The Chartered Institute of Marketing, 57% of consumers do not trust brands to use their data responsibly. Retailers depend on the “surveillance economy”, which has led to a worrying level of mistrust as customers believe brands are not doing enough, if anything, to protect their privacy.

To reverse this worrying trend, brands need to ditch surveillance and start living in the Trust Economy.

The economics of surveillance

Customer data has been treated as an available-for-sale commodity, with its collection dependent on mass surveillance. This transactional relationship has characterized consumer and brand interactions over the past decade, with search engines like Google and social platforms like Facebook leading the way and retailers following suit.

For too long, brands and distributors have relied on tacit acceptance and, to a certain degree, consumer ignorance of their practices. However, consumer attitudes and government regulations have changed. The introduction of GDPR along with notable cases of big tech data misuse has dramatically changed the landscape in which retailers operate. Now, customers are not only much more conscious and aware of their data, but are actively changing shopping behavior based on brands’ data policy.

Brands have generally been slow to respond, leading to a growing crisis in consumer confidence. However, more recently companies like Apple have changed their approach to privacy and businesses are preparing for a “world without cookies” as Google seeks to remove third-party tracking from its Chrome browser, signaling the long-awaited move away from the surveillance economy,

Privacy is a benefit, not a burden

Far too many retailers have seen the introduction of GDPR as an unwanted chore. While some may be disconcerted by the daunting features of GDPR, adopting the policy’s multi-faceted requirements should have been seen as an important first step in regaining consumer trust.

The fact that websites continue to distort consent user interfaces, to trick consumers into making specific selections about their data, exacerbates the problem of consumer trust. Rather than continuing to rely on third-party cookies and making piecemeal changes due to GDPR, retailers should look to make concerted strides in restoring trust.

As users worry about the privacy of their personal data, companies must have a strong policy to tackle this issue. Adhering to data protection guidelines is a start, but retailers need to go further.

The current industry standard lacks the required transparency and will ultimately see consumers walk away and their data along with it. However, an ethical approach to consumer data should not only be seen as a measure to prevent the loss of customers and their data, but to build and strengthen their relationship for the future.

Consumers are now much more engaged and aware of business ethics, and want to spend their money on businesses that match their own worldview and morality. We’ve seen this shift in consumer behavior in the retail space with customer opinions on sustainability and backlash against fast fashion as a great example, but data privacy is just as relevant, retailers who take a stand and implement a transparent and ethical practice when it comes to their customers, data will seize the opportunity to forge more meaningful and lasting relationships with their consumer.

There is no digital future without trust.

The transition from surveillance to the trust economy will present challenges for retailers. However, the principles of retail will not change and there are still ways for retailers to connect and understand their consumers. But it is only through transparency that they can truly develop trusting relationships.

Now more than ever, retailers need to be aware that this transition is a chance to rebuild the modern customer-brand relationship – a chance for change. The reliance on third-party cookies was not only an ethical issue, but also underscored a lack of ambition on the part of retailers and brands to forge meaningful connections with their customers. They were never perfect. their precision was greatly exaggerated and they had reached the point of diminishing returns.

As we move towards a cookie-free future, it is essential that we see a real shift in attitude within the retail industry. One in which there is no room for violating consumer privacy. Instead, businesses and consumers will finally be part of a two-way relationship built on transparency, trust and value.

Establishing clear communication with the consumer about their data is an essential first step. However, all retailers should assess each way they use customer data and see if it can be anonymized and used in a way that does not infringe on privacy. Artificial intelligence systems are now available that can provide actionable insights to retailers to improve customer experience without compromising consumer data. Focusing on consumer behavior rather than demographic information or user identification and location data gives retailers the ability to respond to and understand consumer needs and wants in an ethical manner.

These changes may seem like technical tinkering, but they will have a significant impact on how retailers and brands use customer data and make significant progress in restoring consumer trust. The industry is currently playing with that trust as it continues to treat data privacy as a chore and an afterthought. It is vital that the industry takes an ethical approach to customer data and the economy of trust and seizes this chance to tip the scales in favor of consumers and rewrite the customer experience for the better.


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