“If advances in technology during the industrial revolution swung the balance of power toward the corporation, those of the digital revolution have swung it back toward the customer,” Matt Watkinson wrote in his book, The Ten Principles Behind Great Customer Experiences.
The precarious balance of commercial power, always teetering and tottering! The effects can be easy to observe, but they are hard to measure. A situation that allows generalizations, so I’ll pile on with one of my own: over the past 20 years, ubiquitous information has helped customers amass formidable strength. Strength that enables them to bubble up negative vendor reviews in a single mouse click. Strength that yields lower prices. Strength that reduces or eliminates buying mistakes. Slay the oppressors! Woe to the malevolent enterprises that price gouge and rob sacred purchasing dollars! For consumers, the evolution compares to moving from defending ourselves by throwing stones to having crossbows with curare-tipped arrowheads in our quivers. Pundits reinforce this viewpoint, crafting catchy phrases that have become emblems of our time: “57% of the purchase decision is complete before a customer even calls a supplier!” and “The salesperson is dead!” The pendulum has swung, and consumers have grabbed the rope! Huzzah! Take that, unsavory sellers!
Companies like Alphabet (parent company of Google), Amazon, Microsoft, and Facebook are giddy over this narrative, because it diverts attention from what they do with the massive data troves they are constructing, terabyte by terabyte. While everyone crows about how the consumer information arsenal has advanced to poison arrowheads, vendor weaponry has stealthily gone nuclear.
“Right now in the U.S. it’s essentially the case that when [consumers] post information online, you give up control of it. So there are terms of service that regulate the sites you use, like on Facebook and Twitter and Pinterest — though those can change — but even within those, you’re essentially handing control of your data over to the companies. And they can kind of do what they want with it, within reason. You don’t have the legal right to request that data be deleted, to change it, to refuse to allow companies to use it. Some companies may give you that right, but you don’t have a natural, legal right to control your personal data. So if a company decides they want to sell it or market it or release it or change your privacy settings, they can do that,” said Jennifer Golbeck in TechTalk, July 1, 2014.
The companies that Golbeck mentions perform their data hoarding and analysis in subterfuge. And when it comes to revealing intentions for its use, these and other data behemoths are anything but transparent. It’s “difficult to predict how information you reveal now could be used five or ten years out, in the sense of new inferences that could be discovered. Researchers may find that a piece of information ‘A’ combined with a piece of information ‘B’ can lead to the prediction of something particularly sensitive — also in the sense of how this particularly sensitive information could be used. These are literally impossible to predict, because researchers every month come up with new ideas for using data. So we literally do not know how this will play out in the future,” explained privacy economist Alessandro Acquisti in a TED Talk, Why Privacy Matters.
Like it or not, your online experiences are controlled by algorithms feeding off your copious digital exhaust. That affects what you know, what you will know, and more ominously, how you live. Most consumers underestimate how much companies know about them, but today, sellers possess enough knowledge to infer customer desires, and to surreptitiously influence their actions.
But the government protects our privacy, right? If you believe that, I have some primo swampland in Florida to sell you. According to the website, Practical Law, by Thomson Reuters:
“In the US, there is no single, comprehensive federal (national) law regulating the collection and use of personal data . . . Instead, the US has a patchwork system of federal and state laws and regulations that can sometimes overlap, dovetail and contradict one another. In addition, there are many guidelines, developed by governmental agencies and industry groups that do not have the force of law, but are part of self-regulatory guidelines and frameworks that are considered “best practices”. These self-regulatory frameworks have accountability and enforcement components that are increasingly being used as a tool for enforcement by regulators.
There are already a panoply of federal privacy-related laws that regulate the collection and use of personal data. Some apply to particular categories of information, such as financial or health information, or electronic communications. Others apply to activities that use personal information, such as telemarketing and commercial e-mail. In addition, there are broad consumer protection laws that are not privacy laws per se, but have been used to prohibit unfair or deceptive practices involving the disclosure of, and security procedures for protecting, personal information.”
If you’re feeling inhibited about baring your most intimate digital details to strangers online, there’s a remedy: move offline. Or, to California. The state “leads the way in the privacy arena, having enacted multiple privacy laws, some of which have far-reaching effects at a national level,” according to Practical Law.
That is, until 2017, when Congress and the Trump administration got their mitts on our privacy. Trump made Americans exposed again by approving a bill that weakens consumer privacy protections. “The House of Representatives has gone along with the Senate and voted 215-205 to overturn a yet-to-take-effect regulation that would have required Internet service providers — like Comcast, Verizon and Charter — to get consumers’ permission before selling their data . . . Congress’ approval is a loss for privacy advocates, who fought for the regulation, passed in October of last year by the then-Democratic majority on the Federal Communications Commission,” wrote NPR’s Brian Naylor in an article, Congress Overturns Internet Privacy Regulation.
A “future without secrets?” The confluence of facial recognition and ubiquitous computing has shoved power pendulum away from customers and back to . . . other entities. No one knows exactly where digital stuff goes, how long it’s stored, or who has access to it. In the commercial arena, power is now consolidated in an oligarchy of companies. That creates more concern, because in everyday transactions, a smattering of lightweight consumer information resources are going up against prodigious power brought by heavy corporate investments in data science. I know where I’m placing my bets.
All this makes the breathless hype about customer dominance and vendor weakness in the digital age seem silly. Sure, online product reviews and “transparent” pricing give buyers more lethal curare. But data warehouses chock full of individual profiles tied to predictive analytics give vendors ICBM’s.
“Data are to this century what oil was to the last one: a driver of growth and change,” according to an article in The Economist, Fuel of the Future, May 6, 2017. Market research firm IDC predicts that by 2025, data created and copied will reach 180 zettabytes (or 180,000,000,000,000,000,000,000 bytes). “To ingest it all, firms are speedily building data refineries. In 2016 Amazon, Alphabet and Microsoft together racked up nearly $32 billion in capital expenditure and capital leases, up by 22% from the previous year, according to the Wall Street Journal.”
When we have public will for online privacy, we’ll get legislation to protect it. Don’t count on either one. Data-enabled online commerce is all about speed and convenience. “Personalization” is all about ego, and millennials are fueling the demand. Are privacy and driving benefits from big data compatible goals?
Probably not, because consumers show little appetite for compromise. They want Great Customer Experiences, even if it means exposing their private lives to anyone and everyone, and conferring ownership of their intimate details to others I will not name – not by choice, but because I don’t have the information.
Thanks in part to those who grew up online (aka Digital Natives) and others – like myself – who perfunctorily check “I accept” on legal disclosures, disclaimers, and terms of service, vendors are happy to swing on the power pendulum, as long as it remains on their side. In the meantime, those interested in privacy will have to depend on industry self-regulation. The mechanism for that is data governance, which will be the subject of my next article.
Data “empowers the powerful,” wrote Yale anthropologist James Scott. He’s not referring to Joe the Plumber, or Joe’s customers, for that matter. It’s the emerging group of massive data collectors and amalgamators – Alphabet, Amazon, Microsoft, and Facebook . . . and, lately the Federal government, which last month, demanded states provide the names, addresses, birthdates, political party (if recorded), last four digits of the voter’s Social Security Number, and which elections the voter has participated in since 2006, for every registered voter in the country. That’s a big pot of data! The ostensible purpose: to “fully analyze vulnerabilities and issues related to voter registration and voting,” said Kris Kobach, Vice Chair of the White House commission to investigate voter fraud. Yeah, right.
As consumers, we can marvel all we want over the supposed potency our curare-tipped information arrows provide. But right now, the organizations that possess and use the world’s digital information have vastly more power. Power that’s expanding almost as fast as the amount of data we’re giving up – and they’re absorbing.