Data + Merchants & Consumers
Data. Do you hear the word and yawn, or does the idea of data make you excited with the endless possibilities it can open up? In this blog article, we hope to convince you that data isn’t the old, drab topic it once used to be; instead, data is something to pay attention to and engage with. We’ll explore how meaningful data benefits both consumers and merchants – for different but connected reasons. Let’s dive in.
How Data is Collected
In our last post, we talked about how data runs the world. Companies today use data for practically everything, ultimately seeking to know their customers better so that they can make changes that will help the company be more successful. But how do companies get the data they need in order to do that? There are two main ways: directly and indirectly.
In direct collection of data, a company or app directly contacts their customers and users to ask them to participate in surveys, studies, or questionnaires. Chances are, you’ve had an experience like this before – you navigate to an online shopping platform and a pop-up appears asking if you’d like to participate in a brief survey. Another example is when you make a phone call to a specific company and they ask you to stay on the line after to answer a few questions. Through methods like these, information is collected directly from a user and involves their conscious participation. After it’s collected, information from all the participants is then compiled in order for the company/app to make conclusions about their customers and respond accordingly.
The idea with indirect collection of data is that it’s being tracked in real time as you navigate online. Companies indirectly collect information about your search history, what videos or images you look at, who you communicate with on their platform, what purchases you make, and even activity on third-party sites and apps.
How Merchants Benefit from Data
We’ve already made a case for how merchants benefit from data – when customers opt in to data collection, companies can receive actionable insights about new customers – who’s new, and how did they get there? How often do customers visit your store? What’s the average purchase rate? If you’re running promotions, how many customers converted from your offer? By having ongoing access to specific types of information about their customers or users, companies and apps can streamline their services, start new campaigns, or stop doing things that customers no longer want or find relevant.
Having access to the right kind of data is important, but being able to process that data into meaningful data sets and insights is equally as important. With access to data like that and meaningful interpretations, you can build a stronger company and deeper loyalty with your users through customizing their experiences and offering unique sales or offerings to them.
The bottom line is that data is invaluable to all companies/apps, no matter what they’re built to do.
How Consumers Benefit from Data
Sometimes personal data collection can seem like an invasion of privacy, especially when a company hasn’t made it clear that they’ve been tracking and collecting information about you. We completely understand that! Even with more restrictions and regulations in place (check out the California Consumer Privacy Act), it may be shocking to realize how much companies know about you. It’s helpful to remember here that data isn’t only beneficial for companies and apps; it’s also about consumer benefits. When you choose to opt in to personal data collection as a customer, you are part of the process of new products/services coming on the market that are helpful and desirable. Here are a few other ways you can benefit as a consumer:
1. Through certain platforms, you can actually get paid for sharing your personal data. Instead of mega tech companies getting all the benefits from your information, you can be compensated for their use of your personal information. And some of the platforms you opt into to share your data can then offer specialized deals back to you.
2. You get to choose who gets your information and who doesn’t. It puts you in the driver’s seat instead of feeling like a pawn in big tech schemes.
3. The more people who get involved in a movement of digital consent, the more traction the movement will get. You have data rights that companies are legally expected to acknowledge. The CCPA exists to protect personal privacy and empower users to actively engage in the use of their own personal data. In an increasingly data-driven world, this is of utmost importance.
Because data is so valuable to companies, many of them are willing to compensate consumers for gaining access to their data – especially consumer financial data which includes a user’s transaction and account details. Through open banking, a consumer’s personal financial data can be safely and quickly shared to whoever a consumer wants to share it with, and that can have short-term benefits for the consumer through being paid, or longer-term benefits like the companies developing new products and services that benefit their consumers.
Since data plays a role in almost everything we do today, it would be wise to pay attention to when it’s being collected and why. Consumers have the right to opt in to data collection or opt out of it being saved and shared to different entities. These rights give consumers the power to benefit from their data, as long as they’re willing to engage in the process. Data doesn’t just bring value to companies; it also has value for consumers.
Check out more on the topic of data and its importance in our previous post, which you can find here.