The digital age has fundamentally changed how data is collected and curated is an understatement. Data collection and curation can be a double-edged sword, particularly in the eCommerce industry. Consumers are gaining more agency and power over the buying process, and for businesses to succeed, they must take the lead on data transparency and good data curation practices.
Cybersecurity and data breaches in 2019
According to a 2017 survey from the identity management company Gigya, 68 percent of consumers in the U.S. and U.K. distrust companies that collect their data. Because of the high-profile cybersecurity breaches at Marriott and Quora cumulatively revealing the personal information of over 600 million people, that survey figure has probably grown.
While huge corporations such as Marriott or Quora may be able to bounce back from such disastrous data security breaches, small- and medium-sized businesses are less fortunate. According to the 2017 Verizon Data Breach Investigation Report, 61 percent of total data breaches hit small- or medium-sized companies.
Worse still, small- and medium-sized firms hit by data breaches folded within six months on average, proving just how devastating a data breach can be for small- and medium-sized businesses. However, that’s not to say that data breaches fail to affect large companies.
Indeed, data breaches in large corporations can result in millions or even hundreds of millions of dollars lost and incalculable damage to the brand’s image. In a world where cybercriminals are more common than ever before, many business owners, regardless of the size of their organization, have been left wondering what the best practices are when it comes to data collection and usage.
The answer to that question lies in a multifaceted approach to data handling rooted in data transparency, customer empowerment and data curation.
While the U.S. has lagged in data security best practices for a while now, the EU has long recognized the importance of data transparency. In fact, the EU General Data Protection Regulation was created specifically to enhance data collection and usage transparency in EU businesses, with the ultimate end-goal being consumer empowerment.
In the EU, consumers have a right to demand precisely what personal information a company is collecting and how that information will be used. Consumers in the EU also have a right to demand that they be “forgotten.” In other words, they can demand that their data be completely scrubbed and deleted from a company’s servers.
Business owners must keep in mind that data transparency isn’t just telling customers that their data is being collected; it’s also letting them know why their data is being collected. To this end, business owners may find that including a page on the company website dedicated to data collection practices and the measures the company is taking to protect customer data will help facilitate customer trust.
Letting customers know what their data is being used for – for example, whether it’s being used for demographic research or for product curation – is also important.
Businesses that want to get ahead of data security in 2019 should follow the EU’s lead, personalizing privacy controls in order to provide customers with full control of how their data is used. By allowing customers to dictate what sorts of data they’re comfortable with providing – as well as their use – companies can help foster a sense of security and empowerment within their customers.
Not only can misuse of data put customers at risk, but it can also damage the reputation of the company, leading to boycotts or class-action lawsuits. To protect both themselves and their customers, companies should categorically refuse to sell consumer data without the explicit consent of the customer. Customers should also be made aware of what data security measures are protecting their data and be given a realistic outlook on what they should do if their data is ever compromised.
Businesses in the digital age will often try and squeeze as much data as they can out of customers but doing so doesn’t exactly encourage customer trust. While nearly 90 percent of U.S. and U.K. marketers reported trying to collect every ounce of data they could from their customers, research shows that between 60 and 73 percent of data collected by enterprises ultimately proves to be useless, never even being used for any analytical purpose.
In a digital age driven by online connections and eCommerce, data is currency. What this means for businesses is simple. Companies should pay close attention to what data they actually use to drive their business practices and should then focus on collecting that – and only that – data.
Additionally, most customers are willing to volunteer data if given some incentive. To take advantage of this, businesses should give customers the ability to curate the data they provide fully. They should also supply incentives to customers willing to provide appropriate amounts of useful, actionable data to the organization.
By curating what data is collected, providing customer incentives for data collection, and creating personalized data management tools that allow customers to control how, when and if their data is being collected, businesses can create data management protocols that will foster success in 2019.
Terrace works with eCommerce businesses interested in providing their customers with a safe, user-friendly shopping experience by helping them follow data security best practices. To learn more, visit the Terrace webpage.