Ethical data practices are going to become a standard by which companies have to move forward. Customers are increasingly demanding the security of their personal information be respected. There are countless ways to misuse digital data, and the last decade’s reign of the algorithm has exploited nearly all of them.
What are ethical data practices?
Ethical data practices are a system by which guidelines are in place to illustrate and enforce good versus harmful use of data. It takes into account everything from:
- How it is collected: Confirming consent
- Where it is stored: Minimize risk, prevent breach or hacking
- How and why it is analyzed: Intentions should be transparent
GDPR drives new standards for data
The EU’s GDPR policy measure in 2016 was the first of its kind to alert web users to the ways in which their data was being collected. For years prior, though, advocates made calls for a digital bill of rights. Most notably, Tim Berners-Lee, considered the founder of the internet, called out Google and Facebook specifically for their lack of enforcement around digital privacy rights.
Now, Apple’s iOS14.5 update is live and stoking fear in digital advertisers everywhere. It was predicted that at least 39% of consumers would opt-in to letting apps track them. Turns out the real number is closer to 4% in the U.S. and 12% globally.
What is GDPR and how will it affect your business?
Understanding the nuance of customer consent and legitimate interest is key to GDPR compliance. Customer consent is considered the gold standard of data collection - with good reason. A consent management platform supports compliance.
Google says its web browser update will aggregate anonymized data come 2022. It’ll be a big change in how Chrome attributes third-party traffic sources.
Retailers need to rely more heavily on aggregated and first-party data –– ideally using CDP, or a Customer Data Platform, to protect customer data and use it ethically.
What is CDP?
A Customer Data Platform is a marketer-managed tool that collects customer data, creates a unified customer profile, and makes that information accessible to other platforms and tools so marketers can put it to action.
In other words, it’s a first-party data filing system that organizes customer personas into audiences and tracks lifecycle stages so marketers can treat those customers uniquely based on who they are and where they are in a sales funnel. The tool also protects that customer’s personally identifiable information (PPI) from abuse or theft.
This is the type of data CDPs collect and then use to create customer profiles and specific audiences:
- Behavioral data including web and mobile data
- Transactional and order data
- CRM & offline data sources
- Profile data provided by the customer
- Product data
Why retailers need data protection tools & an ethical data strategy
The global pandemic pushed more shoppers online than ever before, but the heyday of data collection at the expense of shopper privacy will soon be over. This is a shift for marketing and sales teams in terms of how they collect, store, and use data to win business throughout the funnel.
Leading retailers around the world are already drawing their lines in the sand. As they inform existing customers of their investment in data privacy, ethical data usage, and transparent marketing and advertising practices.
Take Australia’s largest supermarket chain Woolworth’s as an example.
“Advanced analytics is key to improving the experiences, ranges, and services we provide to our customers and the support we provide to our teams and suppliers. The way we gather data, interpret it, and protect it, is becoming ever more important,” Woolworths Group CEO Brad Banducci told ZDnet after the company invested $223M in an analytics firm.
Or, look at how Lush, a global beauty retailer, has extended their values around an ethical supply chain to digital ethics, as well.
“If we’re not happy with an ingredient supply chain, we work closely with relevant suppliers to get it right. Why wouldn’t we do the same for our digital practices,” reads the section of their website dedicated to their digital ethics beliefs and policies.
Ethical data usage in retail
As part of Lush’s digital ethics policies, their ethical usage of data includes:
- Encrypted and secure data storage.
- Data that is always available to the consumer and to those the customer has given access.
- And open communication with consumers about how their data is being used by their marketing team.
Lush calls this a premium level of ethical data use, but it can be a baseline for all retailers with CDP and a clear marketing strategy focused on improving the customer relationship via trust and transparency.
What is the future of consumer data privacy?
Brands need to find ways to stay ahead of the wave of ongoing legislation, new rules, and compliance requirements. That includes these three moves:
Does your company have to go all-in on ethical data?
Lush and Woolworths are great examples of retailers investing heavily in data collection, storage, and usage. It’s impressive, and to be applauded, but every retailer can see the benefits of ethical data usage hand-in-hand with CDP.
You don’t have to go all-in and change your values, though there could be marketing benefits to that. Nor do you need to invest millions of dollars in an analytics tool – CDP will prepare you.
Instead, let’s look at one more use case, this time from the U.S. In summer 2020, the nascent swimwear brand Summersalt did something that made headlines. They launched an SMS line for customers and prospects who could text in and receive an uplifting message. It was called Joycast, and it was a hit: for PR, for sales, and for ethical data usage.
Reshma Chattaram Chamberlin, co-founder and chief brand and digital officer of Summersalt, told the Wall Street Journal that Summersalt’s brand is meant to be joyful and sunny. “We went back to that major brand premise, then began to think about how we could in this difficult time think about bringing joy to our consumer,” she said.
And with customers and prospects texting in, the consent is clear, and the data is being used properly. It’s a win-win for everyone, and in a time people needed it most.
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