Data Collection in Commerce

Research Statement

This report will analyze both the uses and risks of personal data in big corporations.

Purpose

The purpose of this research document is to explore the reasons as to why big companies use personal data, what the data is used for, and the amount of data that is inadvertently taken from consumers.

Background and Significance

Big Data has taken a huge role in art in creating today’s Technological Revolution. It is a phrase coined to describe the exponential volume of data we currently hold. Data is collected from a number of sources including cell phones, applications, databases, servers, etc. In return, it can then be used to find trends, patterns, and connections specifically related to how humans behave along with their interactions. This information includes likes, dislikes, preferences, and search and buyer history and is not limited to personal data such as birthdate, social security number, home address and much more. Corporations across the globe have found new ways to use this data in everyday business functions.

Collection of Big Data can be used to a company’s advantage in marketing, finance, and Government. Despite the fact that in a few situations Big Data can be hard to control, it can possibly enable organizations to enhance tasks and make quicker, savvier choices. This information is gathered, organized, controlled, put away and examined, can enable an organization to increase helpful knowledge to expand profit margins, obtain clients and enhance activities. Big Data can help marketing companies collect historical information and use it to their advantage. Past data can help predict who will respond to certain campaigns, allowing marketers to target certain customers for profit. For example, Neil Patel, a top 10 marketer according to Forbes says, “Netflix has 130 million worldwide streaming subscribers. Having this large user base allows Netflix to gather a tremendous amount of data. With this data, Netflix can make better decisions and ultimately make users happier with their service.”(Patel, 2018, para. 7)

When trying to understand how companies are able to collect different types of information about people, it may be easy to assume companies are obtaining data illegally. However, companies are not only operating within their legal rights when they collect and use this information, but they are doing so with the legal consent of their customers. For example, companies like Facebook state “in plain English” that the site gathers and uses your data in their Terms and Service and Data Use Policy (Costine, 2018, para. 1).

Though big data is a great tool to better sell products and to target marketing offers, there can also be many disadvantages. Many companies misuse data reflecting in the act of exploitation and discrimination. Rick Smolan, the writer of The Human Face of Big Data, states in one of his podcasts that there are banks that take advantage of Facebook in order to find out customer’s personal preference. For example, if the customer likes rap music, they will get a lower loan rate to protect their bank (Smolan, 2013, THKR).  Identity theft also occurs as a result of Privacy and Security issues when employees and customer’s financial and personal information is not properly taken care of. Yahoo, JP Morgan, and TJX are some of the largest companies that have been involved with data breaches in the 21st century (Armerding, 2018, para. 2). This paper will explore the reasons to companies incorporating Big Data into their practices. It will also discuss how it can potentially benefit or offset to the company or consumer in the future.