Big Data and Privacy: The Consumer Paradox

Each minute Google records 3.8 million different queries on its search engine, and Facebook as many “likes”.

For twenty years, new information technologies have increased the ability for businesses to collect, store, read, share and use the personal information of individuals. These activities have had many positive effects on the economy in general and some benefits for consumers, including greater personalization and better targeting of products and services.

However, undesirable effects due to the knowledge of these data have also emerged, the most important being the one related to the invasion of privacy. Today, according to the annual barometer of the intrusion conducted for the fifth consecutive year by the Publicis ETO agency, nearly 78% of French people are inconvenienced by the fact that their information is collected and stored in databases.

So what are the end-users’ perceptions of the violation of their privacy in a Big Data environment?

The Challenges Of Big Data In Customer Knowledge

The growing collection of information related to consumer habits, preferences or expectations has given rise to Big Data. This mass of data represents a real competitive advantage today because it can be used by the company to better respond to its customers.

Indeed, Big Data is above all a great opportunity for companies to innovate, develop their sales, their profits, their markets, to address new customers and create new offers.

Thanks to social networks, new applications or connected objects, consumers give access to extremely important personal data for companies: name, sex, contact details. Sometimes even more accurate data is collected, such as geolocation information and frequency of use of this or that application, which allows companies to target their customers and their marketing strategy.

The trend is now to omnicanality and hyper-customization of offers, and we have entered an era where each customer is offered a product adapted to all its expectations. Indeed, the analysis of online and in-store purchases can segment the customer journey to be able to offer the right offer, at the right time and by the right channel.

This is what Amazon has been doing for two years thanks to its sharp use of Big Data. This e-commerce giant uses a predictive algorithm to fully customize the emailing process. Thus, the customer receives a personalized email with one to eight product proposals, based on the information of his previous purchases and his latest research. These personalized recommendations can increase sales by 5 to 15% according to an HMY study.

Combining Trust And Big Data: A Real Challenge For Businesses

We are constantly talking about Big Data and the value this can bring to businesses, but we are not talking much about the ways in which we can obtain this customer data for marketing purpose and ensure that it is relevant, knowing that it is usually data. sensitive and personal.

According to the CNIL, 75% of the data collected and analyzed today directly concern individuals, whether it is the credit card number, the address, the age or the purchasing behavior. Individuals are certainly often ready to give information, but above all, they want to make sure of the use that the company will make of it and know the conditions under which their data will be exploited. In fact, the hyper-personalization of the customer relationship can create distrust on the part of customers who feel more closely monitored.

Beyond the legal constraint, it is the trust between consumers and the company that will make the difference. Thus, even if compliance with laws and regulations is binding on everyone, it is part of a larger framework: that of the bond of trust that unites the company to its customers. This relationship of trust, which is often long to weave, can be broken very easily. It is enough for a customer to feel that the company is misusing his personal data to undermine his reputation.

The confidentiality of data is perceived by many companies as a risk, which naturally puts them on the defensive. In fact, they generally tend not to communicate about their privacy policy. A good practice would be to further consider data protection as a great competitive advantage allowing them to make themselves known for their respect of personal data collection.

Thus, the priority of companies should be the definition of what constitutes an appropriate and responsible use of data, in order to reassure their customers and to guarantee that the personal information collected will be used wisely, thus gaining their confidence. Companies must, therefore, inspire confidence to reduce the fears of individuals regarding the collection of their data. To do this, it is essential to fully integrate the notion of confidentiality of customer data with the company’s practices, rather than continue to perceive it simply as a legal standard to be respected.

What is the concept of “Privacy Paradox”?       

Nowadays, people are divided between the desire to take advantage of the benefits offered by new technologies, the desire to respect their privacy and the desire that their personal data are not unduly exploited, stored or disseminated.

In practice, however, the benefits often outweigh the fears, and individuals end up allowing companies to exploit their personal data without taking precautions to protect their privacy. In 2010, an international survey conducted by Consumers & Convergence indicated that 79% of respondents were anxious not to see their personal data used by organizations without their permission. This survey highlights the “Privacy Paradox” since the majority of individuals today are worried about the exploitation of their personal data but do nothing to protect themselves.

Even if they reject processes and monitoring, few people change their behavior with respect to new technologies. They are aware that every piece of information posted on the Internet is traceable and likely to be used. But this does not mean that they will take steps to hide or frame the data posted online. How is it possible? In the first place because social networks and connected objects have become so important in today’s society that the risk of being watched is ultimately less than the benefits they provide.

In this context, the perception of customers about the use of their data by the company collecting them can actually make a difference; and especially between two companies in the same sector if the practices of one are considered less “loyal” than the other.

To reduce reluctance, companies must do a communication and transparency work on the use of data with their customers. This work will be mandatory in May 2018 with the GDPR, the new European regulation on the protection of personal data. The question is then how to initiate projects in the field of Big Data while respecting the current legislation for the least inappropriate …