Consumers are concerned about privacy in increasing numbers, according to a poll conducted by the Washington Post and ABC News. The poll measured feelings about privacy following the NSA Security leaks, which divulged to the American public just how much information is available to the government. The poll revealed that the majority of respondents feel that the reported surveillance was a violation of their rights to privacy, leading to questions about just how much data is being collected by governments and businesses each day.
Consumers are beginning to notice that information is being collected and served back to them, whether through advertising or coupons at the cash register. In many cases, consumers even agree to allow businesses to collect that data in exchange for being signed up for a loyalty program. A few dollars off of each grocery store bill is worth handing over permission to collect data on every purchase that shopper makes, or so it would appear.
Private vs. Public
As the National Security Administration (NSA) continues construction on a 10,000 square foot center in Utah designed to store all of the data it collects, the words “Big Data” repeatedly come up in conversation. Just what is “Big Data” and why does it take more than a million 4-terabyte hard drives to store it?
So far, most of the questions have been focused on government, with little concern about the data collected daily by Amazon, Wal-Mart, and even social media sites like Facebook. The news that private Tweets were being cataloged and stored in the U.S. Library of Congress for future generations to study set off short-term waves, but most Americans continued happily Tweeting photos of every sandwich consumed and new manicure received.
However, one of the biggest misconceptions about Big Data is that each individual’s information is being separately studied. With so much information collected each day, no flesh-and-blood human is sifting through a customer’s individual purchases or family photos. In most cases, data collection and usage is automated, with a computer searching for trends based on algorithms. Those collected Tweets, for example, will likely be pulled as reports in the future for analysts to see trends related to each year. One person’s daily Tweets would likely only be of direct interest to his or her great-great-great grandchildren.
Getting Ahead of the Public
One of the biggest risks to Big Data’s future is the fact that businesses have forged ahead without consulting the public. So much has changed about the way data is used, it’s nearly impossible for the average consumer to keep up. It’s only natural that those consumers would have questions about the data being tracked. Even if such information is disclosed in the fine print on a company’s paperwork or its website, the customer rarely has time or the patience to read through all of that to learn what information they’re giving away by doing business with a company.
Noting a study by Brick Meets Click that found 64% of companies are tracking customer behavior through Big Data, Ad Age polled attendees at a consumer panel. The poll found that seven out of ten people in attendance at the event were unaware or only somewhat aware of this tracking. The poll further found that the majority of respondents would not change their shopping habits to avoid being tracked.
Good News for Big Data
This response is positive for the large number of businesses that are realizing the benefits of utilizing the large amounts of data available today. Customers are willingly handing over home addresses, phone numbers, and other information in order to save money at retailers. That information can be combined with information collected from partner businesses to develop a more thorough profile of each shopper.
However, as The Age points out, the data collected needs to be accurate in order to be useful. A person looking at pet products on an e-commerce site could merely be doing research for a school project. If that person is bombarded with ads for pet products every time he goes online for the next year, for instance, data collection has failed to do its job.
Stay Behind the Curtain
Perhaps one of the reasons customers are so comfortable with Big Data is that it is being done in the background. They see customized ads and receive e-mails that reflect their personal interests, but both of these things provide information the customer wants. Instead of being bombarded with irrelevant ads, consumers are handed information on sales, special offers, and great products that meet their own personal tastes.
Customers’ comfort level wanes, though, when the tracking is more overt. News that Nordstrom is now tracking shoppers’ habits by tracking their smartphones was met with outrage from some customers, who felt it was a gross invasion of privacy. The technology follows a customer as he or she moves throughout the store by pinging their wireless signals. Although this is similar technology to stores online that use customers’ activities on their sites to study consumer behavior, it ignited an ongoing conversation that led some to say they felt uncomfortable about being watched. In fact, the outrage eventually led Nordstrom to discontinue the program.
Like online e-tailers, brick-and-mortar locations can improve by observing the habits of its customers. If customers are lingering in certain areas and skipping others, businesses like Nordstrom could make decisions to rearrange store layouts. It also could lead to merchandising decisions that positively impact customers.
Whether data is collected online or in person, consumer concerns could be eased by putting regulations in place to protect customer interests. In fact, the Future of Privacy Forum is calling for controls to be put in place for “retail location analytics.” But whether information is collected for online businesses or local locations, it’s important to respect the privacy of customers first and foremost to avoid losing business.
Big Data is growing more than ever. Of course, there will always be customers who are uncomfortable handing information over and, for those customers, the option of paying cash and avoiding loyalty programs will likely be available for at least a few more years. Big Data’s future is bright, mostly because customers have demonstrated they are willing to allow information to be collected on them, as long as that data collection is done in as unobtrusive a manner as possible.
Privacy will continue to be the biggest obstacle for Big Data to overcome. The more consumers learn about what is and is not being collected, the more they’ll likely have questions about that data. By being as open and up-front as possible about data collect procedures, a company can help strengthen loyalty and ensure long-term relationships with those customers.