Is a little-known aspect of GDPR about to disrupt ecommerce?

Jan 23, 2019

Much of the flurry of activity around GDPR trailed off once the deadline for compliance passed in May last year. But is there a second wave on the horizon? Article 20’s right of data portability has the potential to level the playing field for retailers, according to Mark Beresford, director and head of Retailer Payments Practice at the payments consultancy Edgar, Dunn & Company.

 

Mark Beresford

Why might GDPR make waves again in 2019?

The first wave was all about getting compliant ahead of the 25 May 2018 deadline, so that one was very much technical. Now the dust has settled and everyone should be compliant with GDPR, we may very well see a more positive wave of activity around GDPR that will open up digital businesses and create business opportunities. In particular, an aspect of GDPR that hasn’t had much impact yet but I’m sure will do very soon is Article 20, which is all about consumers’ right to digital portability.

 

What is data portability?

It’s the consumer’s right not only to receive their own personal data that a retailer or brand has collected, but to transfer that data from one retailer/brand to another. For an idea of how this will look in practice, a good example is to look at Spotify. Over the course of their subscription a Spotify customer might have created several playlists, and the inability to move these across to a competitor such as Apple Music may well have prevented them changing provider. On top of that, Spotify would have gathered a wealth of personal data about that user’s music preferences and download history, all of which can be used to offer a deeper, more personalised service. Article 20 gives the user the right to transfer that personal data to another music service, removing many of the barriers that may exist to switching provider.

This affects all digital transactions conducted by the consumer, so it will be equally applicable across grocery, airline travel, entertainment, fashion; effectively, every retailer who has a historical digital representation of their customers.

 

How do you see Article 20 affecting retailers in the UK?

The right of data portability has the potential to create a more level playing field in retailing. By handing control of personal data to the consumer, Article 20 will provide huge new business opportunities for retailers and brands alike, particularly for the smaller new entrants and retail disruptors. Smaller fashion retailers probably won’t be collecting the same amount of data on its customers as the likes of Asos or Topshop, but customers now have the right to have that data transferred across to them. That opens up a lot of new possibilities to that smaller retailer in terms of offering a more personalised service and having a deeper understanding of its customers.

Retailers will have to pay more attention to how data is captured and understand that the power of personal data has changed fundamentally. Previously, personal data will have been captured by brands secure in the knowledge that it was only they who would benefit from it. That is no longer the case. Any personal data captured has the potential to be leveraged by your competitors, and vice-versa. So it should have a democratising effect in terms of access to customer data. Companies will suddenly have access to a wealth of data without needing to have the infrastructure in place to collect it themselves.

 

What will this look like in practice?    

The consumer has the right to ask for an electronic copy of their data and have it transposed to another provider, but there is no specific direction as to how that data is transferred, as long as it can be transferred easily and in a readable digital format. There are two ways this could go. Providers may decide to create their own interfaces, or third parties will enter the space and create a common interface that consumers can use to store and move their data. Either way, one would think that consumer demand for uniformity will eventually win out.  Initially, consumers are going to be unware of data portability, but within the next 12 to 18 months there will be a variety of marketing campaigns to promote data portability and a consumer acquisition frenzy is expected to ensue.  This will be happening right across the retail landscape, from digital services through to general retailing, grocery and the travel sector.  This is only going to be good news for the consumer.  How the retailers and brands intend to implement Article 20 and differentiate themselves will be the big challenge.

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