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07/26/2022

How Web 3.0 will challenge centralized data

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Ismail Amla
Ismail Amla, executive VP, NCR Professional Services.

In the Web 2.0 era, a handful of behemoth retailers, including large digital brands, dominated data collection and unification based primarily on online and in-app shopping behaviors.
                                                          
Enter Web 3.0. Powered by improved technology and lower costs, Web 3.0 will challenge the outdated hierarchy of centralized data control and help give consumers more control over their own  data. 
 
Retailers and consumers alike will benefit if data control is put into customers’ hands. Doing so would support greater consumer privacy, while enabling brands to build more accurate profiles of the shoppers who are genuinely interested in their products and
experiences. 
 
Learn what’s moving the needle on customer data 3.0
 
New technology is spurring on Web 3.0. For example, “smart” contracts can be used to allow consumers to better control who can collect their data, how it can be used and for how long. And thanks to cloud computing, 5G connectivity, widely used open source software and cheaper hardware, the costs and time required to deploy data collection and management infrastructure are plummeting. 
 
These improvements are enabling retail technology providers to collect more sophisticated data with little to no upfront cost. In response, retailers have become more digitally savvy – eager to embrace the benefits good customer data brings to brands. 
 
What’s lacking, however, are industry-wide frameworks and standards for data sharing to build out retailers’ systems and to create customer-friendly applications and interfaces for consumers to receive offers and control how their data flows. 
 
Although plenty of work remains, the retail community has a rare opportunity to embed Web 3.0 values into customer relationships and truly put customers first. 
 
Restore customer data agency and retailer control of data
 
Many retailers today only see partial pictures of consumers because they are fighting over who collects and owns the data. They are also at a massive disadvantage to large organizations like Google, Apple and PayPal that have a much broader view of
customers. And behemoth online retailer Amazon handles nearly 50% of retail product searches online, allowing it to sell billions of dollars’ worth of online ads to merchants against product searches and customer browsing. 
 
In other words, most retailers operate at a perennial disadvantage to giants of the field. If the game is unfair, change the rules. Specifically, if smaller retailers can band together and promote a different system where customers own and control their data,
these retailers would both minimize the advantage of behemoth brands and increase the trust between retailers and customers. 
 
Here are three ways that might work. 


1. Create a standard for customer data and exchange.
Today, each retailer collects customer data in different fashions and formats, and their technology systems cannot communicate with other retailers’ systems. A standard format for customer data collection would reduce obstacles and make data more valuable as it would be easier to share and analyze. 

Key to the standard would be mandating an easy way for customers to control their data, such as creating a data escrow service or clearinghouse. Participating retailers would ask customers to opt-in to collect their data and provide a simple way to entertain requests to access their data. 


2. Generate an anonymous pool of retail data cohorts.
Collect customer data in a standard format but only release it in anonymous cohorts of a minimum size, say 1,000. Customers who choose to contribute their data would be rewarded in some fashion – such as discounts or cash back on purchases. Their
behavioral data would go into a pool retailers could query, but only at a certain level of granularity. 


3. Use data brokerages.
Existing point of sale (POS) and retail technology providers are positioned to pool data in anonymous cohorts and create machine learning and data modeling engines.

This allows retailers to mix and match other data sources to test scenarios or look at novel ways to optimize their products, offerings and customer experiences.
 
Build data flow the Web 3.0 way
 
Creating an open data standard and the technology mechanisms for customers to control and sell or permit access to their data will require considerable work and cooperation. But retailers have already shown a willingness to participate in other collective efforts for mutual benefit. 
 
Consider what happened in the first race for online data collection. A handful of larger players quickly emerged and grabbed control of data collection and storage. Today, all
retailers have a golden opportunity to break the big players’ hammerlock, better leverage their existing data and to treat their customers better by giving them control.


All it will take is cooperation.

Ismail Amla is executive VP, NCR Professional Services.

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