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For consumer markets companies, including manufacturers, retailers and service providers, the ultimate stakeholders are the people using their products and services. And never before has it been more challenging to keep them happy. As consumer behaviours have become increasingly centred on digital devices, people have developed more demanding expectations.
This puts tremendous pressure on consumer markets entities to maintain their relevance. In PwC’s 23rd Annual Global CEO Survey, CEOs of consumer markets organisations highlight the speed of change in consumer behaviour as a critical concern and, by an overwhelming margin, see improving customer experience as their primary opportunity for growth.
But here’s the challenge: The prevalence of digital habits and devices brings both enormous opportunities and risks for consumer-focused companies. The risks run the gamut, from failing to delight customers or anticipate their needs to misusing their private information to falling prey to a sophisticated cyberattack. At the centre of all of these opportunities and risk is consumer data, and, increasingly, the prerequisite to getting that data is trust.
Consumers, long resigned to sacrificing privacy for convenience and experience, are realising that they don’t need to accept this false choice. Consumers are demanding both a better, data-enabled experience and more flexibility and control over how their information is used.
In other words, they’re acting like owners of their data — and slowly recognising that it has commercial value.
And they’re starting to get support from legislators and regulators. From the European Union’s General Data Protection Regulation (GDPR) to California’s Consumer Privacy Act (CCPA), the past two years have seen a raft of new regulations around data privacy and security — with scores more in the pipeline in statehouses and governments around the world. The CCPA specifically states that California businesses must provide “a good-faith method for calculating the value of the consumer’s data.”
It’s unlikely that the evolving regulatory action will stop with the current legislation. By an almost 2-to-1 margin, consumer markets CEOs surveyed by PwC believe it’s likely that governments might eventually break up the behemoth companies that now dominate the technology market. These megacompanies are more than just competitors in the online B2C space. They’re also the B2B backbone of much of the industry — the SaaS, cloud storage, AI, customer relationship management and enterprise resource planning providers that enable companies in all industries to operate effectively and efficiently. If some of these companies are broken up, the disruptive ripple effect on the consumer markets industry might resemble a tsunami.
So how should CEOs navigate these swiftly changing currents? The breadth, depth and quality of consumer data that companies hold are often central to their profitability, but CEOs must squarely face the fact that the zeitgeist around data ownership is very different from what it used to be — and the change feels permanent.
Fortunately, there’s an enormous opportunity to lean into the change, and by doing so, find a competitive advantage. Here’s a simple, three-step road map every consumer markets company should follow:
1. Win trust. Protect your customers’ data and privacy.
2. Win loyalty. Draw on that trust — and data — to build a better experience that will keep people coming back.
3. Win hearts. Offer people something they want but don’t expect, before a competitor does.
That 'something' could be financial compensation for data. According to PwC’s soon-to-be-published 2020 Global Consumer Insights Study, more than two-fifths of urban consumers surveyed agreed to three or more conditions under which they’d be willing to share their data. Those conditions include receiving financial compensation for it, enjoying a more personalised experience, and being able to share data with only those they trust or not sharing it with third parties under any conditions.
In fact, new entrants into data-trading services are sprouting up with innovative business models that would put users in charge of their data and pay them on demand for the insights gained from it. And half of global consumer markets CEOs — in line with their counterparts in other industries — expect to see legislation to force the private sector not just to calculate the value of the personal data they collect from users but also to financially compensate them for it.