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Tuesday, 17 March 2015

Data privacy and implications for strategy

Supermarkets bottom on trust
By Warc, 17 March 2015     
LONDON: Supermarkets rate below the government in UK consumers' estimation of their ability to keep personal information private according to new research. 

A report from the Market Research Society's Delphi Group think tank – Private Lives? Putting the consumer at the heart of the debate – was based on an online survey of 2,168 adults.

This found that across six types of organisation – doctor's practice, school, banks, charity, government and supermarket – the supermarket performed worst in terms net trust scores. They returned a figure of -31, marginally worse than government on -28.

The other four were all in positive territory, headed by doctors on +73, followed by schools on +28. Banks managed +17 while charities scored +4.

Overall, the research showed that only one in ten people felt in complete control over their personal information being kept private. 

The unease over use of personal information was highest among the over-55s where 50% thought they had not very much or no control over what information is kept private. 

But almost four in ten of 18-to-34 year olds felt the same way and the report noted that teenagers were taking the issue seriously enough to develop their own counter-measures. 

These included using social coding such as 'in-jokes' or 'vaguebooking' (using an intentionally vague Facebook status to hide the true meaning of messages). Another trend highlighted was the dirtying of data by putting in false personal details to help manage their privacy. 

People are increasingly of the opinion that "datafication" of their lives creates more benefits for institutions than themselves. And that view increases with age.

Almost two thirds (64%) of consumers felt that companies got more or all of the benefit from the information shared with them, and 60% thought the same of government-held data. 

"People are recognising the value of their personal information, and institutions need to be prepared for a more robust justification of what is currently being traded in exchange for disclosure," observed Colin Strong, lead author of the report.

"Value is not just monetary, but social and emotional as well," he added.

Data sourced from Market Research Society; additional content by Warc staff

Implications for strategic management 
By Juma CJO
The low ranking of supermarkets translates into low consumer confidence in the ability of such organisations to keep their information private. This is expected to keep customers aware from engaging in transactions that result in consumers' information being collected and retained. Schemes such as the customer loyalty schemes that are commonly implemented by having every transaction by subscribers monitored could suffer from this poor perception. It is a threat to the success of consumer loyalty programs in supermarkets. However, good strategic management initiatives could be launched to assure the customers of the integrity of their private data. 

With the low average perception among supermarkets, the supermarket that managers to not only institute strong data privacy infrastructure but also convinces their customers of this fact is bound to emerge as the leader of the park. The strategic importance of this capability is that competition is on the rise with the online business platform giving rise to traders whose operation costs are low enabling them to charge lower for their products. This is a mounting threat that can be reduced by leading supermarkets investing effectively in building customer loyalty by guaranteeing data privacy among other elements. 

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