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
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