Advice for retailers: How to better leverage data from and for valuable customer relationships
Professor Krafft, MCM scholar and head of the Chair of Marketing Management (IfM), is the lead author of the study “Insight is Power: Understanding the Terms of the Consumer-Firm Data Exchange”, co-authored by a multinational research team consisting of, among others, V. Kumar, Colleen Harmeling, Siddharth Singh, Ting Zhu, and Jialie Chen. Complementing the November 2020 news release announcing that the study had been made freely available digitally, the article has now finally appeared in the current special issue of the prestigious Journal of Retailing, which focuses on "Re-Strategizing Retailing in a Technology Based Era" and is co-edited by Dinesh Gauri and Dhruv Grewal.
In their article, the authors point out the crucial role of consumer data for today’s retail companies.
The researchers develop a conceptual framework including four key criteria concerning the newly postulated “oil” of economies. These criteria are valid to all types of data disclosures between consumers and retail: data ownership, data intimacy, data permanence, and data value. They make up consumers’ perceptions of the data exchange terms that guide - often implicitly - consumers’ expectations toward the data exchange with the retailer and ultimately influence important firm outcomes. By further identifying factors that foster a firm’s 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. Thus, creating the Grand Value for all stakeholders comes with both opportunities and challenges. Derived from its conceptual framework, the study outlines new research avenues and thereby lays the foundation for further insights into the future of global retailing.
Has this highly topical subject sparked your interest? Access the full paper here (open access).
This news release has been written with the help of Svenja Enste, student assistant at the Chair of Marketing Management.