Advice for retailers: How to better leverage data from and for valuable customer relationships
The new study “Insight is Power: Understanding the Terms of the Consumer-Firm Data Exchange” has been accepted for publication in the Journal of Retailing. The paper has been co-authored by Professor Krafft and a multinational research team consisting of, among others, V. Kumar, Colleen Harmeling, Siddharth Singh, Ting Zhu, and Jialie Chen.
In their article, the authors point out the crucial role of consumer data for today’s retail companies. Underlying consumers’ disclosures of data to firms are, often implicit, terms that guide their expectations toward the data exchange. The researchers develop a conceptual framework that identifies criteria making up consumers’ perceptions of the data exchange terms and highlights how these terms influence important firm outcomes. By further identifying factors that foster firms’ ability to leverage consumer data as well as factors that might increase the risk of violating consumers’ terms of data exchange, the authors derive practical insights from a marketing perspective. Their findings show that understanding and operating within consumers’ terms of data exchange is essential to signal respect for consumer privacy while enabling firms to deliver data-driven value to consumers. On the contrary, violating these terms, even implicit ones, can create negative externalities with financial, reputational, and legal repercussions on the firm.
The article will be published in 2021 in a special issue on Re-Strategizing Retailing that is co-edited by Dinesh Gauri and Dhruv Grewal.