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The massive Target data breach─where up to 110 million people’s information was stolen, including names and email addresses the company collected─shouldn’t impact other retail loyalty programs at this point according to Kerry Bodine, co-author of “Outside In: The Power of Putting Customers at the Center of Your Business.”
The Target breach is the largest breach of a U.S. retailer since at least 2006 when TJX reported a data breach affecting 46 million of its customers. A year after the TJX breach was first reported, the scope of the TJX breach widened, and as many a 96 million consumers were impacted.
“There will be a push and pull involved,” Bodine explains, “but I think we’re in the real early days for consumers to be actually concerned about their data and their security there. I didn’t see many consumer behavior changes after TJX.”
Bodine says there would need to be multiple data breaches at various retail companies to see noticeable changes in customer loyalty programs moving forward.
“We’d need multiple data breaches in close proximity to have consumers really change behavior on a mass scale,” she says. “People think this didn’t happen to me and I wasn’t affected so I personally won’t worry about this. If consumers aren’t changing their behavior, there’s little motivation for loyalty programs to change.”
Some retailers might change their loyalty programs based on a risk perspective, Bodine says, rather than any discernible change in customer behavior.
“I think several things would have to happen back-to-back for consumers to think their information was not secure,” Bodine said.
Bodine says millions of people aren’t afraid to share personal information such as birth dates, email addresses, home addresses, and social security numbers with a plethora of brands.
“When I see that information asked for, I can understand it’s helpful for companies to know people’s ages, birthdays, etc.,” she adds. “People are willingly giving out this information. But I think a lot more will have to happen for consumers to really start taking this seriously.”
In the future, Bodine believes companies will need to be more explicit as it relates to personal information collection.
“Companies will need to be more explicit as far as what the giveback is,” Bodine says. “Give us your birth month or year, and we’ll be able to provide this type of experience for you or offer you a product you like at a discount in your birth month. Be more explicit because that way at least people will be able to weigh the tradeoff in their heads to determine what it’s worth to them.”
When people fill out loyalty card information in a store or online, Bodine says most feel compelled to complete the entire form.
“We’re trained at this point to fill out forms and give everything up without thinking about it,” she says. “More has to happen to raise consumer consciousness of this.”
In the wake of the Target data breach, Bodine believes brands must be transparent.
“Trust is a big issue,” she says. “Target is a beloved brand. How does Target regain trust? What’s the halo effect? It will be interesting to see what happens for her on out.”
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