RILA Survey: High Priority Placed on Protecting Consumer Data

This is a strange issue in that, as the article states, consumers do not give credit or loyalty to retailers that do a good job of protecting their data, but are merciless on retailers who violate their trust. So it is a strategic advantage provided a negative experience does not happen.

Retailers owe it to their customers to protect their data. This is just basic business sense. Touting this might bring a retailer undue attention from hackers. It's better to leave data security behind the scenes and be ultra-vigilant in safeguarding the information.

Max Goldberg, Founding Partner, The Radical Clarity Group

This is and will be a competitive requirement--not a "strategic advantage."

Ben Ball, Senior Vice President, Dechert-Hampe

It sounds like protecting data is a must for all retailers, and the ones that drop the ball will suffer at the hands of angry bloggers and tweeters. If social media is the new way for retailers to market themselves, merchants that don't have processes in place better get their act together fast.

Doron Levy, President, TheMortgageMachine.ca

Agree. Most consumers don't even think about this but if a violation occurs, they will be unforgiving. This is similar to product recalls. Something you must do to protect your brand but won't buy you many "atta' boy" awards.

Susan Rider, President, Rider and Associates, LLC

Ben Ball said it--it's not an "advantage" to keep customer data safe; it's a fundamental requirement, it's a contractual obligation, and it's the law.

At the same time, if you don't capture and capitalize on customer data, you are driving blind. You will have no idea who your best (and worst) shoppers are, what they buy, or when you are starting to lose them.

Ben Sprecher, Founder and VP, Marketing, Incentive Targeting, Inc.

Protecting consumer data is fundamental in creating shopper trust and loyalty. It is in retailer interest to communicate with shoppers on how data is protected and if/how it is shared. Shoppers should have an option if data is to be shared with third parties and know what protection is afforded there as well.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Many retailers still don't have a credentialed Chief Information Security Officer on staff. Things may look rosy when retailers are compared to other retailers, but compared with other industries retail lags alarmingly.

Cathy Hotka, Principal, Cathy Hotka & Associates

These two ideas--data privacy and data utilization - go hand in hand in terms of retailer responsibility.

As a general rule, most retailers do an acceptable job with protecting consumer data (though there have been a few notable exceptions such as the problems TJX had) but the majority of retailers completely fail to properly utilize customer data.

While the obvious opportunity for customer data is marketing, there are also a wide range of applications where data can be used for business and customer intelligence (especially when linked with merchandising and financial data) and operations (e.g., merchandise returns, loss prevention).

Retailers are not always customer-centric nor likewise embracing forward leaning-technology. Those that are (and do), such as Amazon, Nordstrom and Best Buy, will continue to outperform their competition.

Phil Rubin, CEO, rDialogue

This issue is becoming increasingly important for retailers, as numerous recent stories related to data breaches attest. And this includes firms that diligently comply with data-security guidelines, such as the retailer Hannaford Brothers.

In a recent study, my coauthors (from Wharton and London Business School) and I show that customer data can be collected in an easy-to-manage, scalable, privacy-preserving format without significantly compromising the inferences that can be made about the customers' purchasing activity. We use simple data summaries and show that if our proposed methodology is used, these data summaries can work just as well as individual-level data. This can be an attractive data processing option in many settings for many firms.

A "proof of concept" is available in the paper "Estimating Customer-Lifetime Value Using Aggregated Data" and a more detailed and very comprehensive paper is coming soon. If anybody is interested, please contact me in a few weeks.

Kinshuk Jerath, Assistant Professor of Marketing, Tepper School of Business, Carnegie Mellon University

I'm not sure that protecting data is in the final sales analysis all that important. Look at TJX, Hannaford and others that have suffered breaches. None seems to have taken much of a hit as a result.

'retailveteran'