December is here; and the Christmas countdown has officially begun. Retailers are preparing for the most important period of the year. A time when sales could make or break certain businesses. But 25 December is not the only date to which companies are counting down. Exactly five months on from Christmas Day will come the official implementation of the biggest ever overhaul of European data legislation, in the form of the General Data Protection Regulation (GDPR). The retail sector is not alone in approaching the new regulation with some caution, writes Jon Cano-Lopez, CEO, REaD Group, exclusively for RetailTechNews. What will the future hold with a more controlled data landscape?

In a nutshell, GDPR will give customers back control of their own data. The consensus is that GDPR is long overdue; customer data needs to be managed more appropriately and transparently. In the past, data has often been used for purposes where the intention was never made totally clear. This regulatory change is daunting, but on taking a step back and considering the data landscape objectively, change is most definitely the only way forward.

A data dream?

GDPR will certainly have benefits for customers. They will have far greater control over whom they are contacted by. However, on closer inspection, a 'data nirvana' would not be as ideal as it initially sounds. If brands are left with less data, customers stand to lose more than they first realise. For example, fewer personalised emails from your favourite clothing brands, giving you a heads-up about an upcoming sale of which you weren’t aware. Fewer earlybird offers for tickets to see your favourite sports team or band. Fewer loyalty points or air miles. A post-GDPR 'data nirvana' may leave customers feeling left out and disgruntled.

The data/value exchange

Shoppers will soon realise that data sharing works both ways. They will inevitably lose out on tailored deals if they choose to sever ties with retailers. Therefore, it is up to retailers to earn customer trust and persuade them of the benefits of a data/value exchange. Research has shown that consumers do welcome appropriate and carefully personalised communications from marketers. In the post-GDPR era, the power balance will shift in favour of customers. Therefore, only forward-thinking retailers who start preparing for GDPR now will succeed in convincing customers of the benefits of data sharing.

GDPR terms

Those retailers seeking clarification on what the regulation entails, and how it will impact the retail industry, should ensure that the intended use of data is completely unambiguous. This will apply to marketing activity such as emails and targeted personal advertising. And, from next May, retailers will also have to ensure that their database is fully clean and up-to-date. To adhere to this, retailers must implement first-class data-cleaning products – now available as a seamless access Data-as-a-Service (DaaS) solution – to ensure that they are doing all they reasonably can to demonstrate compliance.

A few exceptions

As with any legislation as far-reaching as GDPR, there will be circumstances where the rules of the regulation are less straightforward. For example, obtaining active ‘consent’ from a customer may not be needed in circumstances where businesses have a legitimate interest in contacting customers. Nearly everybody has a contract of some kind, whether it’s for a phone, broadband, or household energy. In this instance, businesses would not need to obtain active consent to contact customers about their contract; but they would need permission if they were to market to them. This idiosyncrasy is more ambiguous in the retail sector. For example, when does a customer cease to be an active customer and only a prospect? This is one area where clarification will possibly need to wait for case law.

Getting GDPR-ready

GDPR noncompliance is not an option for retailers, unless they want to risk a sizeable penalty fee of up to €20m (£17.63m) or 4% of annual global turnover. Regardless of the financial consequences, there is the threat of reputational damage, and the customer trust lost would be challenging to rebuild. In the run up to GDPR and post-implementation, retailers will be competing for consent from customers. The sooner consent is obtained, the more effective data-driven marketing processes will be. Retailers would be doing themselves a favour by thinking ahead, to avoid a last-minute panic in May.

Forget the British Pound, data can be a currency too

Both retailers and consumers benefit from a data/value exchange. Retailers must therefore respect the value of data and the insights it sheds into shopping behaviour. Gaining access to customer data is a privilege, not a right. Retailers must obtain consent from its rightful owner – and once in possession of this data, manage it responsibly.

Building customer trust

Thanks to GDPR, data-sharing will become far more transparent. It is an industry-wide responsibility to clearly explain to customers what is done with their data and how they stand to benefit from data-gathering. This is an opportunity to wipe the slate clean and place both parties on a more equal footing. By putting customers first and prioritising their rights, the customer experience will be more effective. This will build trust and earn retailers the right to be personal, unlocking long-term engagement in an ever-changing marketing landscape.This content was originally published in RetailTechNews.