This blog is the second part of the series, diving deeper into how e-commerce marketers can effectively build customer trust and boost sales through smart data privacy practices.
In the dynamic dance of e-commerce, balancing the collection of consumer data with the obligation of respecting consumer privacy is a nuanced art.
For those at the helm of privacy — from business leaders to chief privacy officers to marketing professionals — this balance isn’t just about adhering to privacy regulations — it’s a core strategy for building trust and boosting business performance and sales. That’s because 76% of the U.S. general population indicate they want more transparency around how their personal data is being used by companies, emphasizing the urgent need for businesses to align their practices with consumer expectations.
So how can e-commerce businesses effectively choreograph a routine that respects consumer preferences, safeguards consumer privacy, and serves as a sales enabler?
Let’s tie on those dancing shoes and step in.
Know Your Data with a Data Inventory
Like a choreographer plans every movement, your business needs a deep understanding of its data collection practices. This is where a data inventory—sometimes called a data map—comes into play.
A data inventory acts like a script, outlining every move of your company’s data, including what personal data you collect, why you collect it, where it’s stored, who can access it, where it goes, and how its journey over time. This should include all interactions, from customer orders and returns to engagement through customer service channels (emails and text messages), reviews, online surveys, loyalty programs, your marketing activities (digital marketing and analytics) and more.
Knowing these details helps you not only perform seamlessly but also ensures you’re in tune with privacy laws.
Is a Data Inventory a Legal Must?
While there’s no federal mandate in the U.S. requiring businesses to maintain a data inventory, if your company operates within the scope of the GDPR, creating a data inventory is required.
It’s worth noting that even if your business is headquartered in the United States, and you collect data from any EU resident, then the GDPR applies to you. There are no exceptions for small businesses.
For US businesses needing to comply with state privacy laws, a data inventory is crucial. It helps companies get a big-picture view of their data collection activities and can enhance operational efficiency, improve marketing strategies, and mitigate risks by offering a clear view of how data flows through your company. A data inventory also helps a company know their data and that’s useful to draft accurate privacy notices. It helps companies understand why data is collected because some laws require having a business purpose to collect and use data. It also helps honor privacy rights and identify what vendors have data and how to protect it.
What should be included in your data inventory?
At a bare minimum, e-commerce companies’ data inventories should include:
- What types of data you collect (name, address, phone number, username, password, location, etc.)
- How you collect data (website cookies, online forms, other ad tech tracking platforms, etc.)
- Where, how, and how long you store data (Do you store data in the cloud, on an in-house server, or with software companies? (no, just because it’s stored with a third-party software company does not absolve you from all obligations)
- How you use this data (marketing personalization, analytics, etc.)
- Name and contact information of controllers and processors
- Who the data is shared with (third parties like agencies, contractors, vendors, partners)
- Data subjects (employees, applicants, customers, prospects, etc.)
- If (and how) you transfer personal data to other countries or international organizations, as well as documentation proving the transfer is for legitimate purposes
Note – the above list is not comprehensive. If you need help keeping track of all business data collection activities, use a data inventory template as a starting point.
Embrace Consumer Privacy Rights
Once you conduct a thorough data inventory you will be ready to manage individual privacy rights by understanding each twist and turn your data takes.
Respecting privacy rights means allowing individuals to control what businesses and their partners know about them and how that information is used. Consumers can check what data a business has about them, request corrections, and even demand its deletion.
Your customers’ rights to control their personal data are concrete and actionable, supported by laws like the GDPR in the E.U. and various U.S. state privacy regulations, such as CCPA. These laws empower not only customers but also employees and website visitors to control their personal information, from basic details collected during transactions to more sensitive data acquired through loyalty programs or customer surveys.
As part of this dance, your company’s role is to gracefully honor consumer requests.
By proactively strategizing how to handle privacy rights requests (sometimes called data subject rights), you ensure a smooth performance that avoids any missteps – like non-compliance or diminished brand reputation. This approach is crucial as a significant majority of consumers —79% according to a recent Cisco survey— indicate that it’s too hard for them to know and understand how companies are using their data, underscoring the importance of adeptly managing privacy rights.
What E-commerce Companies Need to Do?
At a high level, managing privacy rights requests involves:
- Establishing clear internal procedures and processes for accepting and responding to privacy rights requests.
- Verifying that you record, track, and maintain records of privacy rights requests, whether a manual process, like a spreadsheet, or software to help process requests.
- Ensuring timely responses to these requests as specified by each privacy regulation.
- Keeping privacy notices up-to-date and including language that informs users of their rights, how to exercise these rights, and how to submit an appeal.
- Educating every team member who might handle or could possibly receive privacy rights requests (think marketing, customer service, or sales) on your company’s policies and procedures.
Twirl into Transparency: Establish and Maintain Do Not Sell Links
While most privacy laws don’t explicitly say it, ad tech activities, including targeted advertising and analytics, are often considered a “sale of data.” And some jurisdictions even require businesses to provide individuals the option to opt-out of targeted advertising, and under CCPA, a link that says “Do Not Sell/Do Not Share My Personal Information” on your website’s homepage with a link in the footer, or by using the CCPA icon that states, “Your Privacy Choices.” Note that when a company shares data, such as an email or mailing list, with a third party and that third party can also use the data provided for its own purposes, that is likely considered a sale of data. Individuals under privacy laws have the right to opt-out of the sale of that data.
Your Privacy Choices
Harmonizing Data and Desire: The Art of Cookie Management
Ecommerce companies often leverage a myriad of tracking technologies for their marketing activities. Cookies, for instance, play a crucial role much like diligent backstage helpers. They enable functionalities like persistent logins and memory for items in a shopping cart, even after a browser is closed. They also streamline the checkout process by storing information such as product details and payment methods. Cookies also collect data on user behavior, which is vital for analytics, personalizing marketing efforts, and enhancing the overall customer experience.
Pixels, beacons, and fingerprinting technologies (to name a few) can also make appearances in e-commerce marketing efforts. These tools, while varied in their functions, share a common goal: to collect data on website visitors.
The critical considerations here aren’t just the types of technologies employed but how they’re used, who manages them, and the mechanisms behind their operations.
Just as a dancer needs to be mindful of their movements, your company must manage cookies (and other ad tech platforms) with transparency and respect for customer preferences.
Review Your Cookies and Cookie Consent Banner Regularly:
- Regularly check your website’s cookie banner(s) to ensure they provide the requisite notices and offer users opt-in and opt-out choices to comply with legal requirements.
- Ensure that cookies in your preference center are accurately listed and categorized.
- Eliminate any dark patterns in your cookie consent banner e.g., font/color/box shape discrepancies that push the consumer to “accept” rather than “reject” cookies.
- If using cookie consent software, conduct an audit and verify the tech functions properly. Are cookies properly firing? Are cookies really getting blocked if a user opts out?
- If you add or remove cookies from your website, update your cookie consent software and privacy notice and/or cookie notice accordingly.
Cookie Management Roadmap
Check out our Cookie Management Roadmap for tips and guidance to help you streamline your cookie review.
Optimize Opt-In/Opt-Out Processes
It’s crucial for your customers to trust that your business takes privacy seriously, especially when it comes to opt-in/opt-out requirements. When consumers choose to opt in or out of data collection, they are providing consent and literally telling you the way they want their data is handled—this is something that should not be taken advantage of.
And sometimes users activate tools that do this for you, so that is why it is important to recognize Universal Opt-Out Mechanisms (UOOMs), like Global Privacy Control (GPC), which informs websites about a user’s privacy preferences, allowing individuals to opt out of their personal information being sold or shared for targeted advertising.
Conclusion: Build Trust Through Transparency
In this intricate dance of e-commerce, every step toward transparency and respect for consumer privacy rights enhances customer trust, strengthens business relationships, and grows sales. And you can build up your knowledge in these areas by downloading our 6 Steps to Privacy Compliance for Marketers Guide.
By mastering the choreography of data management and engaging with consumers transparently, e-commerce businesses not only comply with regulations but also create enduring customer loyalty – that ultimately leads to more sales and amplifies business growth.
Want to learn more about data privacy?
Red Clover Advisors is dedicated to simplifying privacy and working with businesses to build flexible, compliant programs that build consumer trust. Enhance your privacy knowledge by downloading our guides on topics like data inventory, privacy notices, and cookie management. You can also join our newsletter below to stay on top of the latest industry news and privacy trends.