When Does Collecting Customer Data Turn Creepy?

Harnessing customer data isn’t just about showing companies which products are popular and how much people are wiling to pay for them. So-called big data also can help them streamline delivery processes in ways that minimize costs.

Amazon, for example, was able to improve the speed of parcel deliveries to within two hours by taking detailed information, such as individuals’ purchasing history and location, to determine where it should locate its warehouses and how it should stock them.

Overstepping the mark, however, could leave a company’s reputation in tatters.

“The most effective thing organizations can do to assure customers that they can be trusted with people’s data is to tell them what they intend to do with the information and to assure them it won’t be shared with third parties.

In a report entitled “Creepy or Cool”, professional services firm KPMG found that more than half the 7,000 customers it surveyed across 24 countries had decided against buying something online due to privacy concerns. And the line between what practices they would and wouldn’t accept wasn’t always clear.

For example, 82% said they weren’t comfortable with the sale of their data to third parties in exchange for a faster service, better product range and home delivery. And 55% baulked at the idea of information from a fitness tracking device being shared with them and their employer.

On the other hand, 57% were happy to have a smart energy meter installed in their home telling their supplier when they eat, sleep and use appliances.

There were, however, concerns that appeared more uniform than others. For the most part, respondents weren’t impressed with unwanted marketing, having their personal information sold to third parties and weak information security systems.

More than half were OK with sharing their gender, education or ethnicity online, but just 16% were willing to share their location and only 13% would divulge their medical records.

“The most effective thing organizations can do to assure customers that they can be trusted with people’s data is to tell them what they intend to do with the information and to assure them it won’t be shared with third parties,” Gary Gill, a forensic partner at KPMG said. “They also need to demonstrate strong cybersecurity systems.”

It turns out, however, that even personal security comes at a price: almost half the respondents said they would accept free or cheaper products in exchange for less privacy.

SHARE
Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

PARTNER CENTER