Unless you’ve been living under a rock, you’ve heard the National Security Agency vehemently denying that its spy program is trampling on the constitutional rights of citizens, while privacy advocates bellow about the rise of Orwellian dictatorships. They do love trotting out the 1984 metaphors.
Frankly, there are hypocrisies on both sides. But retailers using data mining and loyalty programs, could get caught in the wringer if they don’t police themselves and those that gather the data. More disturbing is what I’ve heard in retail circles recently about reining in customer analytics for fear of incurring the wrath of privacy activists.
I sincerely hope that government surveillance is more concerned with terrorist plots than people’s personal proclivities. But surveillance isn’t new. It just went electronic with George Orwell’s vision of an authoritarian utopia and the Internet has simply made it easier.
The fact is that someone, somewhere keeps tabs on you from the time you’re born to when you open your first checking account, use your first credit card, switch on your first computer, or make your first cellphone call.
Contrary to popular opinion, the Constitution doesn’t guarantee the right to privacy, although the Supreme Court said it’s implied in several Amendments. This was brought to an illogical and frankly, dumb, conclusion in 2011 by the California Supreme Court in the case of Pineda v. Williams-Sonoma where the plaintiff alleged that the store lied about needing her zip code to complete a credit card transaction. She said it was used it to track down her home address for marketing purposes and that her information was being sold.
The takeaway is that where there’s a will, there’s a lawyer and a court that will consider the legal ramifications of a tempest in a teapot.
Where does that leave retailers? Customer surveillance, or customer analytics to use a gentler term, has become a rallying cry throughout the industry and one of the most valuable tools in the retail arsenal.
But the furor over the NSA’s actions, will likely unleash a spate of data privacy bills in Congress this year. The latest is the “Apps Act,” which requires consumers to sign off on privacy policies before using them. This moves the industry closer to European privacy laws, with very strict rules about what companies can and can’t do. At the very least, it’s another barrier between customers and the checkout. And, as we have seen, people will simply abandon their carts if the process becomes too cumbersome or inquisitive.
Congress simply isn’t capable of coming to grips with complex privacy issues. As I said, the industry is more than capable of policing itself and making the best use of the data for itself and its customers. But in the immortal words of comic book icon Stan Lee: “With great power comes great responsibility”.
Never take consumers for granted and don’t keep secrets. Tell them how the information helps create a better, more rewarding shopping experience. Assure them that the data is safe and not for sale to outsiders. Make sure all IT security systems are up-to-date—even surpassing industry norms—and initiate oversight of your own IT departments. Most important, don’t abandon data gathering for fear of backlash—real or imagined.
Collecting and analyzing shopper data is not an option. It is a business imperative for improving operations, sales and profits and anticipating customer demand. The competition for reliable information is intense, but cheaper to obtain from reliable outsiders then ever. Why not use it to its fullest?
Sometimes having a Big Brother watching is not such a bad thing.