How Big Data Can Help and Hurt Your Business

As the use of internet enabled devises increases rapidly, the amount of information collected and analyzed by companies has grown exponentially. Frequent shopper cards, mobile check ins, social networking, and online purchases all provide companies information on what, where, and when consumers spend money. This data collection is usually portrayed as a benefit to the consumer in the way of targeted discounts and a way to remember what items you have purchased in the past. As much as this technology can help retailers and consumers, it does raise a privacy concern when this information is unknowingly being collected and sold. The question that companies must ask themselves is how I can effectively use consumer data to help my business without alienating customers.

A good example of a retailer using customer data to benefit both the customer and the retailer is the My Lowes card which will store what color and finish paint you purchased so you can easily match the same color in the future. These types of programs allow Lowes and similar retailers to adjust inventory, modify distribution routes, and target certain markets more efficiently. This use of information can be beneficial but needs to be used carefully. Check in’s from mobile devises are also commonly used to give coupons or discounts to customers but can also provide important information on what time of day certain buyers prefer to shop. These types of situations are a win-win for everyone involved but sometimes the methods and uses of data collection come into question and raise concerns with consumers.

The negative aspect of the proliferation of data collection and analysis on consumers is when this information is being collected and used against them without their knowledge. A recent article in the Wall Street Journal “BorrowersHit Social-Media Hurdles“ explains how some companies are collecting information on people from social networking sites to help determine their credit worthiness. While sometimes voluntarily given up as part of an application process for people who have poor credit and are looking for a second chance, this data is also largely being used without consent by major lending companies. Targeted marking based on browser history is also a trend that some find unsettling. If you look up an item on google the next time you open Facebook you will usually see an ad from the same retailer for the same item you were just looking at. This is done without the users consent and raises concerns about who else might be seeing your search history.

The market intelligence and customer information available to businesses is a great tool but must be used carefully in order to realize its full benefits without causing concern with customers. The massive collection of information from the web could be a possible legal and public relations issue if it is taken as an invasion of privacy. Being upfront and honest with customers about the collection and use of their information is the best way to utilize this information in a way that is beneficial to all parties involved.

Image courtesy of gfi.com