Retail Data Wars

Who Owns the Customer Data & How Should Brands Adapt?

Customer data is the new currency of retail. And everyone wants a piece of it !

From the moment we browse a product online to the loyalty points we accrue in-store, our every interaction is being recorded and analysed. This is the battleground of the Retail Data Wars, where brands, retailers, and consumers are locked in a high-stakes struggle for control over customer data, a resource as valuable as any product on the shelf. This conflict isn't just about ownership; it's about power, trust, and the very future of personalised commerce.

This insatiable hunger for customer data, where 'everyone wants a piece', is fueling a growing consumer frustration. Consider the opaque data collection practices, the constant stream of retail data breaches, and the pervasive feeling of being tracked across every online platform. The result? A surge in consumer distrust, a growing demand for ethical data practices, and a push for greater accountability, forcing a rethink of the way retail data is being managed.

The stakes are high. For brands, data translates to product innovation and customer loyalty. For retailers, it drives targeted marketing and operational efficiency. And for consumers, it's about reclaiming control over their personal information and ensuring a secure, personalised shopping experience.

This blog delves into the core of this conflict: who truly owns customer data, how brands, retailers, and shoppers can coexist in a data-driven ecosystem, and, more importantly, what’s the best way to navigate this contentious landscape. Let’s explore these competing claims, the legal and ethical grey areas, and how we can work towards building a viable and trustworthy data ecosystem for all.

The Battle Lines: Defining Data Ownership

The evolving retail landscape is a battleground for consumer data, with each stakeholder claiming rightful ownership. Retailers assert their control over transaction data and customer journey insights, arguing these are generated within their physical and digital environments. They rely on this data for targeted and personalised marketing, inventory optimisation, operational efficiency, and competitive advantage.

Brands, however, counter that consumer relationships revolve around their products, not retail platforms. They emphasise brand loyalty and reputation as the true drivers of purchases, arguing that customer insights are essential for product innovation and meaningful customer connections.

Consumers, on the other hand, are becoming more aware of their central role in this puzzle. Empowered by data privacy regulations, they are now beginning to insist on their inherent ownership of personal information. They demand transparency and control over data collection and usage, seeking personalised and convenient shopping experiences without compromising their privacy.

This conflict reflects the complex reality of modern commerce, where data simultaneously represents business intelligence, competitive advantage, and personal privacy. The viable path forward likely involves a balanced framework acknowledging the legitimate interests of all parties rather than an absolute victory for any single stakeholder.

Achieving this, however, is particularly challenging in Asia's diverse markets, each with its unique technological, cultural, and regulatory landscape.

The Erosion of Trust: Legal, Ethical, and Experiential Consequences

The battle for data ownership has far-reaching consequences, impacting not only legal and ethical considerations but also the fundamental relationship between retailers, brands, and consumers.

1. The Reshaping of Ownership: Data Privacy Regulations

First, let's examine how data privacy regulations are reshaping ownership dynamics. Key markets across Asia have implemented stringent frameworks—India's Digital Personal Data Protection Act, China's Personal Information Protection Law (PIPL), and Singapore's Personal Data Protection Act (PDPA), among others—all shifting power towards consumers by requiring greater transparency and explicit consent."

Traditional implied consent models—where customer approval was assumed through passive actions—are being rapidly phased out. Regulators now deem implied consent insufficient, especially for sensitive data, and demand explicit, informed consent through active opt-ins and specific permissions, reinforcing consumer rights, transparency, and data security. Consequently, privacy policies and terms of service have become critical tools. Though enforcement varies by region, non-compliance carries significant penalties.

This shift has forced Asian retailers and brands to redesign customer journeys, consent interfaces, and data collection methods, adding friction but building trust. Prioritising transparency and ensuring compliance with regional regulations has become inevitable, not just for legal protection, but to maintain consumer trust in an increasingly privacy-conscious marketplace.

2. The Core Challenge: Data Silos and Erosion of Trust

However, the core challenge remains: data silos and the resulting erosion of trust. Building a collaborative ecosystem grounded in legal and ethical data-sharing practices among retailers, brands, and consumers is easier said than done.

Data silos, where customer information is isolated within different departments or systems, create disconnected and frustrating experiences. For example, a customer who buys an item online but decides to return it in-store often encounters staff who lack access to their online purchase history, resulting in confusion and delays. While some retailers like Sephora Asia and Central Group have advanced unified commerce strategies, most traditional retailers still grapple with fragmented systems.

Equally important is the growing consumer distrust driven by hidden data collection practices and opaque data usage. For instance, many large retailers have come under scrutiny for collecting vast amounts of user data, including detailed browsing behaviours and purchase histories. In addition, frequent data breaches make things worse for retailers and brands, leading to consumer anxiety and erosion of trust.

3. The Added Complexity: Data Localisation

To further complicate matters, data localisation requirements in many Asian countries force companies to store data within specific regions. This adds complexity, increases operational costs, and challenges retailers to maintain consistent customer experiences while safeguarding data privacy across different regions.

Navigating these challenges requires a careful balance of integrated data practices, transparent communication, and rigorous compliance with evolving regulations.

Building a Mutually Beneficial Ecosystem: Strategies for Collaboration

The future of retail data hinges on building a mutually beneficial ecosystem that empowers consumers, builds trust, and creates a win-win scenario for all stakeholders. Achieving this collaborative vision requires a multi-layered approach, including:

1. Leveraging Zero-Party Data: Prioritizing data explicitly and willingly shared by consumers to build trust and personalize experiences.

2. Secure Data-Sharing Agreements: Establishing clear and robust agreements between brands and retailers to govern data exchange.

3. Customer-Centric Data Platforms: Empowering consumers with control over their data through innovative platforms.

4. Transparency and Consent: Adhering to transparent data practices and obtaining explicit consent from consumers.

Underpinning these strategies must be stricter data laws and legal policy frameworks that ensure accountability and protect consumer rights. Let's explore each of these in detail.

1. Leveraging Zero-Party Data

Zero-party data is information that customers willingly and explicitly provide through quizzes, surveys, social media polls, campaigns and other methods. The potential here is immense as it allows retailers & brands to deliver personalized experiences and build stronger customer relationships while respecting consumer privacy

It's also a relatively straightforward way for brands and retailers to start building trust and demonstrating respect for consumer privacy. Over 90% of marketers in the Asia-Pacific region are actively collecting zero-party data, recognizing its value in creating more relevant and respectful interactions.

For example: Beauty retailer Sephora uses interactive quizzes and preference centers to gather customer preferences for personalized product recommendations and enhanced engagement. Similarly, Southeast Asian retailers like Lazada and Tokopedia encourage users to specify their interests and preferences for customized product suggestions and promotional offers, improving user satisfaction and loyalty. This not only provides valuable data but also creates a more interactive and enjoyable customer experience.

2. Secure Data-Sharing Agreements

Traditionally, secure data sharing was complex and costly. However, advancements in technology, particularly cloud-based data platforms and APIs, have streamlined this process. Modern data-sharing platforms allow brands and retailers to establish secure, controlled connections for data exchange, enabling them to share specific datasets while maintaining data governance and regulatory compliance.

However, this requires detailed and effective data-sharing agreements with clear guidelines on data usage, access controls, security protocols and termination clauses.

Brands and retailers are increasingly collaborating through the sharing of purchase data. Analyzing this shared data allows brands to significantly improve demand forecasting, optimize inventory management, and minimize stockouts.

For example, consider a scenario where a grocery retailer and a food brand want to collaborate on a targeted marketing campaign. To do this effectively, they need a secure data-sharing agreement that specifies- what data will be shared, how it will be used, who will have access to the data and how it will be protected. Finally, it needs to include liability & compliance in case of any potential breaches.

3. Customer-Centric Data Platforms

As consumers become increasingly aware of their data rights, the concept of data wallets or personal data stores (PDS) is gaining momentum. These digital tools empower consumers to securely store, manage, and control their personal information, such as purchase histories, preferences, contact details, and browsing habits.

These PDS form the foundation of customer-centric data platforms. These platforms shift power dynamics by enabling consumers to control who accesses their data, how it's used, and under what circumstances.

Retailers and brands can then leverage consumer-approved data to offer personalized recommendations, discounts, and rewards that resonate with individual preferences and make shoppers feel understood and valued

However, the customer-centric data platform space is still in its early stages, and there is no single dominant platform. Global non-profit initiatives like MyData are working to standardize these platforms, advocating user empowerment through personal data stores, interoperability, and ethical data usage practices.

4. Transparency and Consent -explicit opt-ins

Ultimately, the effectiveness of consumer data usage relies on transparency and trust. Clear and concise privacy policies are essential, ensuring customers fully understand how their information is collected and used.

To cultivate trust among users, brands and retailers must adopt explicit opt-in data collection practices, actively seeking consent rather than assuming it. Giving customers complete visibility and control over their data is the only way to strengthen trust and encourage greater engagement.

Where the future lies

Looking ahead, the future of retail is increasingly customer-centric, with a shift towards shoppers owning, controlling, and actively managing their personal data. While still in its early stages, the emergence of new data marketplaces and platforms promises to reshape traditional dynamics, placing customers firmly at the heart of data exchange.

However, to fully realize the potential of this collaborative data ecosystem, a fundamental transformation is needed. Brands and retailers must embrace transparency and prioritise ethical practices. The central question they must address is this: How can we collectively build an ecosystem rooted in trust, transparency, and shared value?

While there is no easy solution, the key to resolving the Retail Data Wars lies in empowering consumers, starting with an unwavering commitment to ethical, consent-driven data practices that genuinely benefit all parties involved. Only then will it lead to a more transparent and consumer-centric retail experience.