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Data regulation: challenge or opportunity for retailers in 2019?

While it’s no secret the General Data Protection Regulation (GDPR) continues to shake up the entire scope of data privacy around the world, many Australian businesses are still unclear about how the European Union’s data protection brainchild will impact their day-to-day operations.

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The GDPR provides the Australian retail sector with the opportunity to proactively inform customers about their data rights, and how data-driven services benefit them as stakeholders in the business. Organisations can build trust and strengthen loyalty, which will create a springboard for customer collaboration—a stepping-stone toward data-enabled innovation.

However, the scale of recent data breaches, such as PageUp and Timehop, has been a major catalyst for a loss in customer trust. In the first half of 2018, Australia ranked fifth in data breach incidents by country. A number of questions and concerns around how customer data is being used, handled and secured have since surfaced.

Despite the opportunities and insights data collection presents, the local retail industry still faces a major challenge in the level of knowledge and awareness among its consumers. Education will be the primary strategy for retailers to shine a positive light on the importance of data collection for both customer and business, and leveraging the principles of the GDPR will be the critical to address the challenges and negative perceptions of data privacy.

How can the Australian retail sector position itself to thrive in a post-GDPR world?

Build customer trust through unmatched communication

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A data literacy campaign will help consumers better understand how their data is being used, enabling retailers to focus their efforts on informing consent and helping customers understand the benefits created by data sharing, such as personalised services.

The GDPR is a powerful tool for retailers to evaluate whether they’re currently meeting the needs of their customers, and identify those who may be feeling uninformed or disempowered.

A sector that is open about its data practices will encourage data sharing and build trust among its customers, ensuring their personal data is handled ethically and beneficially. Data Governance Australia’s Code of Practice is a strong resource that incorporates provisions around transparency and the ethical use of data to help retailers fully realise the consequences of their data practices.

Create a platform for data-enabled innovation to thrive

Australian retailers must accept the reality their customers will want to exercise their right to data access and portability, and be willing to not just respond efficiently and effectively, but also go further in providing trusted, valued services.

Application Programming Interfaces (APIs) present an efficient way to meet increased consumer demand for access and portability, as continually introducing new and improved services can be quite a costly process.

Amazon’s use of APIs to improve communication, collaboration and competition makes it a leader in this space – however, businesses globally are majorly lacking in this area, with 70 percent of companies unable to fulfil data access and portability requests within the GDPR’s specified one-month time limit.

Create a sector-wide strategic program

The retail sector should work openly and collaboratively to address GDPR principles and broader industry trends. This will empower stakeholders to implement the requirements of the new regulation, including sharing strategies to innovate and heighten data portability.

Protocols and tools for data governance and usage – such as the Open Data Institute’s Data Ethics Canvas – should be widely implemented and standardised to efficiently address common areas of customer distrust.

By practicing good data privacy and stewardship while taking into account the GDPR principles, retailers can take advantage of a rare opportunity to build brand value and demonstrate they truly care about their customers. Regulation aside, respecting data privacy should be a pillar for every Australian retailer.

By Jason Nathan, Global Capability Managing Director for Data for dunnhumby.

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