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How To Preserve Customers’ Trust: Build A ‘Privacy-First’ Culture

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Building trust lies at the heart of modern retailing: 57% of global marketing leaders point to data security, privacy and accountability as the most critical demands of modern customers, according to a study by the CMO Council. While improving each of these elements is important, to be truly effective retailers need to make these concerns the foundation of their entire company.

“The central theme of this study is that there is a need for a privacy-first culture,” said Tom Kaneshige, Chief Content Officer at the CMO Council in an interview with Retail TouchPoints. “This is a culture that doesn’t just protect customer data, but also protects the customer experience and ultimately protects consumer trust. A privacy-first culture is really a customer-centric culture.

Paradoxically, customers’ expectations of privacy coincide with their desire for more individualized experiences with retailers. The ever-growing emphasis on personalization and real-time interactions puts retailers at greater risk for data breaches, but shoppers won’t stand for any slipups. Target’s massive 2013 breach incurred a visible “cost” of over $320 million when lawsuit settlements, remediation and infrastructure security expenses were taken into account. Additionally, analysts projected that the loss of reputation could have reduced the retailer’s brand valuation by a further $1 billion.

A Privacy-First Culture Comes From The Top Down

Every person within a retail organization has a part to play in developing this privacy-first culture, but marketers (and the CMO in particular) are at the vanguard, according to Kaneshige. Marketing is responsible for personalization, makes regular use of customer data and will be held accountable if something goes wrong. Therefore, it is every CMO’s responsibility to become familiar with, if not an expert at, privacy best practices, and to remain cognizant of how the company’s practices shape the customer experience.

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While marketers are data’s most prominent users, today nearly every department taps into these insights at certain points, and they all need proper guidance when it comes to privacy. That means the CEO needs to dictate the overall company culture, including the role played by privacy.

“It starts at the top,” said Kaneshige. “This is not a Chief Security Officer problem — it’s a CEO problem, so it has to be part of the CEO’s mindset. They have to understand that this is a holistic problem, meaning it’s not just an IT problem: marketing has to understand their role, sales has to understand their role and IT has to understand their role.”

An approach that combines top-down direction with interdepartmental collaboration is key to maintaining customer trust. One example of its success is Samsonite, which considered leveraging facial recognition and eye tracking technology to better understand the way its shoppers browse and move from item to item. However, the company’s top-down, ethics-driven culture helped the team realize the cameras would feel “icky” to customers, and Samsonite decided against implementing the technology to preserve their shoppers’ trust.

“Say Samsonite did do this, and somebody caught wind that they were tracking people’s eyes and using facial recognition,” said Kaneshige. “That kind of information can be put up on social media, and it will affect the brand overnight.”

Trust Takes Time To Build, But Can Be Lost In An Instant

The conversion-driving potential of advanced technology can be tempting, but retailers need to weigh the benefits against the potential for a breach of consumer trust. Shoppers are extremely protective of their privacy, and retailers need to take care before they adopt new technology. Kaneshige cited Google Glass as an example: the technology had many potential uses, but the associated loss of privacy generated severe backlash.

Retailers can’t afford to risk their hard-earned trust by using tools that may generate just a small uptick in conversions. Customer expectations are constantly moving and evolving, and a single breach in trust can immediately erase years or even decades of goodwill — offsetting whatever benefits the retailer hoped to gain.

“A lot of the culture today is around sales and growth,” said Kaneshige. “[Executives] don’t prioritize privacy, a lot of times they wait for regulations to take action and they don’t really take it seriously. This is creating a powder keg situation where the customer data is flying around data centers and marketers are tapping into it in real time, but there’s not a lot of practices in place to really safeguard consumer trust.”

Therefore, building and protecting customer trust is the most important function of a privacy-first culture. Even government regulations, such as Europe’s GDPR and the recently enacted CCPA, tend to fall short of shoppers’ actual demands, so retailers need to take a hard look at their commitment to privacy and work to ensure they are truly earning the trust of their customers.

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