Data Privacy: How to be Worthy of Consumer Trust

A year or two ago, Sam's Club (the warehouse stores that are part of the Walmart company) offered customers a new app called "Scan and Go." The company set up folding table stations inside the stores staffed by store representatives to tell customers about the app and how it worked and to give out pamphlets.

In case you aren't familiar with it, the idea is this -- you download the app, open it on your phone, and login with your membership ID.  As you put items in your cart in the store, you use the app to scan the barcodes with your phone. When you are done, you skip the checkout lines and go straight for the exit, because you have already checked out and paid on the app. The door staff checks a QR code on your phone at the exit, just like they check the receipts of people who checked out the conventional way. Easy and fast.

But as a person who has covered big data and analytics for a few years now, I didn't sign up for that app when it came out. I could appreciate the convenience, but how much more data would I be giving up to a corporation? (Never mind they probably already had all my data anyway, since I was a member of that warehouse store and swiped my membership card before I checked out every time anyway.) Recently, in a hurry to get out of the store quickly, I downloaded the app and gave it a try. The convenience has won me over, I admit.

"We used to make a joke that the cost of our personal data is a free pint of beer," said Robert Hetu, Gartner vice president and analyst, when I told him that story. "Sometimes it doesn't take much to get you to give away a lot of data."

Consumers have gotten comfortable with giving away their data. Every app we download asks for permissions -- sometimes access to all your contacts, access to your phone and media, access to your geographic location, and more. Websites and ad networks track your browsing history on the web. It's not the National Security Agency you need to be worried about surveilling you. It's the companies you patronize. But consumer attitudes towards commercial brands that collect data may be changing.

"There's a renewed fear," Hetu said. Much of it has come as a result of all the Facebook breaches of consumer trust, allowing its partners to harvest member data. Plus, every day it seems like there's another headline about how more companies are acting negligently by not keeping data secure, or are actually selling your data, including how mobile carriers are selling your location data.

It's not a good idea to violate your customer's trust like that, according to Hetu, who says that trust is the foundation of the relationship. Companies that want customer loyalty need that relationship.

"You had a very high degree of trust that Sam's Club is not going to use your data in an invasive way," Hetu said. "They are not trying to figure out what apps you use at home."

Violate that trust and the consumer may delete your app or stop doing business with your company altogether. Violate that trust on a wide scale and your reputation could suffer, making more consumers less likely to trust you with their data.

As consumers, we are being offered more devices that introduce the opportunity for digital security breaches and breaches of trust, from electronic door locks to digital assistants to wrist watches that track our every move, location, and heartbeat. It wouldn't take much to tip things over into creepy. If we turn over our data and trust to companies, we deserve to have it be protected.

Hetu said Gartner advises companies, even if they are only operating in the US, to follow the European Union's GDPR as a good reference framework for consumer privacy. The US is like the wild west, he said. Data privacy is not regulated by the federal government. That means regulations have been left to 50 individual states, plus territories.

Companies could put together 50 different privacy programs, sure. Or maybe they could go with the strictest one and the one that does the best job of ensuring consumer data will be handled the way that consumers would want companies to handle it. Which is probably why Gartner recommends following GDPR.

"It's a good way to build that trust," Hetu said.

For more about data privacy, check out these recent articles.

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