Experts discuss the importance of maintaining trust in retail all the time, but a recent report goes a step further in calculating its dollar value.
Retailers, as well as other online businesses, are getting better at collecting large amounts of personal data from their customers. While this data may prove very useful, it also represents a certain type of risk as those companies take on the responsibility of keep the data secure.
A new report from the World Economic Forum, Rethinking Personal Data: Strengthening Trust, developed in partnership with The Boston Consulting Group, examines the use of personal data and its ability to create value. It also examines the damaging trend of lost trust due to recent high-profile data security breaches.
The report also notes the challenges that arise from modern data technologies, resulting in our current state of hyperconnectivity. In the modern era, companies, governments and individuals all face challenges of unprecedented scale, speed and complexity.
“The borderless flow of personal data requires individuals, business leaders and policy-makers to all coordinate in innovative ways to unlock its long-term value,” says Senior Director of IT and Telecommunications at the World Economic Forum, Alan Marcus. “Critical to these new models will be their ability to hold stakeholders accountable through principle-based policies.”
So how much is consumer trust really worth to retailers? The report gives some indications, based on a projection of online retail reaching $2 trillion by 2016 among G20 nations. In this scenario, the report predicts the massive influence that consumer trust levels have, with increasing trust swelling the total to $2.5 trillion, and less trust shrinking it to just $1.5 trillion.
“Given that this $1 trillion range is from just one small part of the broader personal data ecosystem, it provides an indication of the magnitude of the potential economic impact when other sectors (health, financial services, etc.) are considered – potentially in the tens of trillions of dollars,” the report states.
Of course, these numbers are a far cry from the hard-and-fast breed of statistics that you can set your budget to, the report does explore some novel territory. These concepts are of increasing importance for online retailers, as well as other businesses that operate on a digital level, as trust will continue to play a large role in influencing online revenue.