With all of the devices collecting information about our daily habits, what is the end result of the accessibility of so much consumer data?
Data is unarguably ubiquitous and pervasive. Its impact pervades every facet of our daily lives. The simple act of driving a car now generates vast amounts of data from multiple sources. Information on our location, the amount we were charged traveling in the toll lane, our speed and braking, the temperature in the vehicle, our starting point and final destination … and on and on it goes.
You walk into a store, and an advertisement pops up on your smartphone with a 20% discount on the hoodie you were texting to your friend about two hours before. Or you walk into your hotel, and receive a text from the concierge with some really cool activities based on your earlier Google search. Simultaneously, the hotel receptionist compliments you on your choice of rental car, from a company that just happens to be a business partner. The hotel television has tailored commercials with programming based on the channels you watch, and the hotel spa sends a text with specials based upon services you chose on your last visit.
I think you get the idea. Consumer data is everywhere and, seemingly, all-seeing and all-knowing. This is all good, right? You feel pampered and appreciated, because technology has made your life easier, and you “saved” money, too. But, is there a cost for this convenience? How much risk are we absorbing by having all of our data shared and monetized, with and without our permission, let alone our knowledge? Our digital footprints have consequences.
This data-centric world we now live in has an upside and a downside. Let’s examine the positives and potential negatives.
The Benefits of IoT Data
IoT data collection is becoming commonplace in virtually every industry. Hospitals use smart sensors to track IoT devices on patients and track the activities of nurses and doctors, helping the hospital or clinic gain efficiencies. Connected IoT devices are used in the transportation industry to monitor truck tire wear, oil levels, brake quality and engine status to more efficiently manage maintenance and improve productivity. IoT devices are in our homes, collecting data from myriad things such as thermostats, door bells, lights, garage doors, appliances and more to increase efficiency. Smartphones and voice-activated devices gather data about our purchasing preferences and buying habits. These scenarios demonstrate just a few of the many ways in which we benefit from data collection.
Consumer Data is Valuable
The data that is collected and monetized by companies is highly valuable. Beyond improving the customer experience, consumer data is being capitalized on by companies selling it to advertisers that tailor online ads. Insurance companies now promote the use of smart devices in our vehicles that monitor our driving habits, tracking our speed levels and braking patterns. They then reward those who drive within their standards by offering discounts on insurance premiums.
Consumer data is an extremely important resource for companies, which continually collect information that gives them valuable insights into how to improve their products, while at the same time allows them to improve the consumer experience. Companies are profiting from all this data and leveraging it to outperform their competitors and drive revenue. According to a Gallup analysis, applying consumer data to behavioral economics can increase sales growth by 85% and improve gross margins by 25%.
The Downside of Ubiquitous Data
While companies reap the rewards from customer data, are consumers aware of how their information is being used and are they giving away too much control? Shouldn’t consumers have a share in the assets gleaned from their data and more control over its use? Our technology provides invaluable data that improves our lives and boosts our economies. However, it also lays our lives bare to the risk of corrupt and manipulative practices that can create havoc and loss.
Consumers Need Data Protection
It is important to advance data privacy awareness and promote transparency in how data is being collected and used. There should be a mechanism that enables consumers to share in the monetization of their information. There is certainly a need for a collaborative organization that protects consumers, working as advocates for data handling and privacy and giving consumers greater control over their data. This might include independent regulatory agencies that implement and enforce standards, and security and privacy domain experts that work together on the consumer’s behalf.
These applications are just the tip of the iceberg, as IoT becomes more pervasive. The data collected from IoT devices will bring benefits, as well as consequences, to companies and consumers alike. Our data currency is highly valuable. However, if companies monetize data solely for their own benefit, or it is compromised by disreputable entities, the value we might gain from our data can be lost.