The way Yaron Cohen sees it, companies today must do in the digital world what came naturally to neighborhood merchants who saw their customers every day. “In the old world, when people used to go to the corner store and meet the same shopkeeper every day, he’d know their tastes and what they’d buy and would personalize the experience for them,” says Cohen, a user experience researcher focused on digital strategy.
“But now we’re in a place where everything is mechanical. In the world of e-commerce there’s no human connection, and so to understand that customer, you have to collect data. This is where privacy problems start.”
Organizations of all sizes and stripes are collecting increasing amounts of data on individuals as they seek to create better customer experiences and deliver personalized services. A study of 1,000 executives from Skynova, which offers online invoicing for small businesses, found that 86% of the 1,000 business owners and executives it surveyed gathered data from its customers. It found 75% of businesses with fewer than ten employees did so, compared to 93% of those at organizations with 100-plus workers. The study also showed that 64% collected data on their customers from their social media sites.
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