At Grocery Stores, Customer Marketing Data Is Becoming The Product
For years we have been writing about how hedge funds have been buying any type of data they can get their hands on to try and anticipate moves in the American consumer and, by proxy, the market.
And now the latest spot they could be buying their data from could wind up being your grocery store. Everybody knows that we are now accustomed to putting our phone numbers or email addresses into a computer almost literally every time we buy something - but few people know why they really do it and even fewer feel they have control over what retail establishments do with such data.
Consumers feel powerless about the data-grab. A new study from the University of Pennsylvania showed that "79% of Americans feel they have little control over what marketers can find out about them", according to CNBC.
The same survey found that over half of adults in the United States, approximately 56%, are unclear about the meaning of "privacy policy." A common misconception among these individuals is that such policies assure that a company will not distribute their personal data to third parties unless consent is explicitly given.
Lead researcher Joseph Turow, Robert Lewis Shayon Professor of Media Systems & Industries at the Annenberg School for Communication said: “People don't feel that they have the ability to protect their data online — even if they want to.”
Among other things, the Penn survey revealed:
- Only around 1 in 3 Americans knows it is legal for an online store to charge people different prices depending on where they are located.
- More than 8 in 10 Americans believe, incorrectly, that the federal Health Insurance Portability and Accountability Act (HIPAA) stops apps from selling data collected about app users’ health to marketers.
- Fewer than one in three Americans know that price-comparison travel sites such as Expedia or Orbitz are not obligated to display the lowest airline prices.
- Fewer than half of Americans know that Facebook’s user privacy settings allow users to limit some of the information about them shared with advertisers.
R.J. Cross, director of Public Interest Research Group’s Don’t Sell My Data campaign, told CNBC: “Retailers today are doing just about everything they can to get as much information about you as possible, because that’s a whole new revenue stream for them.”
“Almost every single company that you’re shopping at today is in the business of selling your data, and you and your data are their latest product,” Cross continued.
And the market for data on what you buy is growing exponentially.
As of 2021, the data brokerage industry was estimated to be worth around $319 billion, with projections suggesting it could exceed $545 billion by 2028, CNBC wrote.
Traditionally, retailers relied on purchasing information from data brokers to understand consumer behavior. However, in a shift towards greater efficiency, these retailers are now bypassing intermediaries and are gathering consumer data firsthand through various methods, including loyalty schemes, location tracking, mobile app usage, and digital receipt analysis.
Refive founder and CEO Mitul Jain concluded: “My face is part of the data that’s being captured, my behavior, and all of that gives off many more pieces of information about me, my age, my gender, my ethnicity. And all of these pieces of information can then again be combined together with all these other little tidbits that I’ve been leaving behind from my shopping journey.“
