08.07.21

Data Privacy And Security In Digital Retail

Personalization and user data have become significant drivers of e-commerce growth. However, users are increasingly interested in managing and protecting their data. Digital retail needs to find the right balance between personalization and privacy.
How to find out the clients needs
Sellers and buyers do not communicate "live" in e-commerce like in traditional retail. However, e-sellers often know more about their customers than sellers in physical stores.

When using the Internet, a person forms a digital footprint thanks to technologies built into our browsers. Based on this digital footprint, retail can develop a buyer profile, which contains information about the city and country of residence and the person's interests and needs. Thanks to this data, e-commerce can offer its customers the right product at the best time at the best price.

E-commerce sites can analyze customer behavior on their website, track purchase history, and create personalized offers. In other words, the use of personal data helps digital retail to sell products faster, more profitably, and with minimal effort for both buyers and sellers. E-commerce offers what is important and necessary for a person, and it does not show non-interesting goods for him.

Users support personalization and understand this is a win-win deal. According to researchers from the Invespcro company, more than 50% of customers believe in the effectiveness of personalized offers, 57% are willing to give personal information in exchange for other benefits. In comparison, 77% want to know how exactly the business uses this data.
Privacy and data protection trend
On the one hand, consumers understand why e-commerce stores need user data and value the personalized experience they receive. On the other hand, this use of data is uncontrolled in some cases. Consumers are tired of the advertising dominance on websites, in e-mail, messengers, and SMS. That is why recently, the consumer wants to know more and more about how and who uses their personal data.

Massive data leaks from popular online services like Facebook, Yahoo, Adult Friend Finder, and corporations like Marriott, First American Financial, Equifax, MyFitnessPal have contributed to this scrutiny.

Technology trends 2021 presented by the analytical company Gartner reflect an interest in data privacy. The list of top trends mentions privacy-enhancing computing. These calculations are a result of the need to share data while maintaining confidentiality or security. Consumers and businesses want to use data in a secure environment with accurately measurable consequences of providing that data. In addition, the Gartner report mentions the so-called cybersecurity mesh - an environment for the safe use of data.
How Google and Apple protect user data
The public's demand for data protection has caused most tech companies to worry about data protection and privacy. Google and Apple are among them, as owners of the largest mobile application stores and developers of popular browsers.

Apple announced the so-called "privacy labels" launch — privacy labels at the end of 2020. Their goal is to educate users about the information that mobile app developers collect. Such a label should accompany the description of the application in the App Store. Apple is confident that this will help users better understand what data the application needs and not install those that require too much.

Google introduces specific changes regarding mobile applications for Android too. Applications can no longer access the list of other programs installed on the smartphone.

Such restrictions will require market participants, including retailers, to rethink their mobile apps and make sure they are not asking users for unnecessary data.

Another change announced by Apple in the summer of 2020 is that mobile app developers will have to ask users for explicit permission to use their data in ads. If any, these permissions were indicated, perhaps, in user agreements, which no one mainly read. Now users will have to give explicit consent for their data to be available in ad targeting. Apple postponed the launch of this feature so the market could prepare for these rules. But in early April 2021, the company announced that the update would be available in the new version of the iOS 14.5 operating system.

As for Google, they also continued to implement changes. They removed support for third-party cookies in the Google Chrome browser. The company explained its decision by the desire to improve user privacy and offer other tools to help advertisers recognize their audience and target ads.
Personalization with respect
The growing interest in privacy and data protection has become the new norm for businesses in the past few years. E-commerce is no exception — users want to know why online sellers use their data and what benefits consumers have when they provide this data. Accordingly, e-commerce needs to learn to live and work in such an environment. They need transparency in the use of data, an explicit user agreement, ease of setting up user profiles, and subscriptions to advertising offers. These features are becoming a mandatory requirement for successful work and a demonstration of respect to customers, more demanding and attentive to their personal data.
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