Consumers will push back until they see real benefits and retailers do more to earn their trust.
In the hands of retailers that cultivate Big Data, safeguard it, and mine insights to connect their stores more powerfully to shoppers, Big Data can truly differentiate.
On the other hand, data breaches – most notably Target, but Neiman Marcus, Albertsons, Sally Beauty Supply, and others as well – are constant reminders that Big Data initiatives can also be quite damaging.
The Target incident cost the chain its CIO and CEO, and a loss of consumer trust that has quashed performance for the past eight months. In hard dollars, the breach has cost Target $129 million pre-tax so far. In reputation and financial results, the fallout expense continues to mount – Q2 earnings before income taxes fell by 61.9%, and full-year profit forecasts are down to $3.10 to $3.30 per share from earlier guidance of $3.60 to $3.90, states a late-August earnings report.
The security hurdle is huge for retailers, whom hackers and fraudsters seem to target regularly. Even new “chip and pin” credit and debit cards “are as much at risk” as traditional cards when U.S. retailers utilize traditional credit card readers. They are only better protected when retailers use a chip and pin reader, says Trend Micro, a maker of security software.
F3 senses that consumers are firming their resistance to data encroachment by retailers – when all people want from stores is to be able to buy items, not disclose their life patterns. Loyalty programs are little more than discount mechanisms at most supermarkets – and we believe many customers sign up with false IDs to help keep insurers and other third parties from tracking what they consume. Until retailers present consumers with a more compelling case for data, and can be trusted with it, the public is on a path to saying “We won’t take it anymore,” like in the movie Network.
Staying away from breached retailers is one passive response. Consumers could potentially affect greater change once they get vocal about tighter security standards, limits on what stores can do with their data, which companies can view it, and more. We believe retailers still have a chance to align with consumers on the positive aspects of Big Data – but only if they keep their own houses pristine, work hard to earn trust, and move quickly to do so.
For consumers, these positive aspects could include: a more personalized shopping experience, check-in rewards, targeted discount offers, scan-and-go in the store or online delivery and click-and-collect options, and more. Yet these benefits may pale next to consumer outrage about being tracked in stores and digitally, if figures like these from a new global research study by ACI Worldwide and Aite Consulting don’t markedly improve. The study, Global Consumers: Concerned and Willing to Engage in the Battle Against Fraud, shows: