Executive Briefings

Litigation Suggests Care Needed in Selecting Vendor to Mine Your Customer Data

A new U.S. Federal Trade Commission (FTC) case illustrates how retail chains can get in serious legal troubles when they use third parties to help mine shopper data.

Although the FTC did not, in that case, go after the retailers who either provided the marketing company with access to the data or who purchased the analyzed data, we can expect that, in the future, either the FTC or consumers themselves will go after those chains.

Retailers routinely hire technology companies or marketing companies to help them better know their customers. These outside vendors can help retailers comb through mountains of data to determine the profiles of their customers, their wants and desires.

But if retailers want to avoid liability for unfair and deceptive trade practices, they had better ask not only what these companies can do, but also how they plan to do it. Even buying aggregated data from an untrustworthy source, or allowing a third party to mine your consumer data, can lead to big trouble.

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Keywords: supply chain management, value chain, value chain IT, customer analytics, business intelligence, retail data mining, retailer-customer interaction, retail customer privacy concerns

Although the FTC did not, in that case, go after the retailers who either provided the marketing company with access to the data or who purchased the analyzed data, we can expect that, in the future, either the FTC or consumers themselves will go after those chains.

Retailers routinely hire technology companies or marketing companies to help them better know their customers. These outside vendors can help retailers comb through mountains of data to determine the profiles of their customers, their wants and desires.

But if retailers want to avoid liability for unfair and deceptive trade practices, they had better ask not only what these companies can do, but also how they plan to do it. Even buying aggregated data from an untrustworthy source, or allowing a third party to mine your consumer data, can lead to big trouble.

Read Full Article


Keywords: supply chain management, value chain, value chain IT, customer analytics, business intelligence, retail data mining, retailer-customer interaction, retail customer privacy concerns