The COVID-19 pandemic has caused significant disruptions in the way B2B2C manufacturers interact with their customers. With retail outlets closed or operating at limited capacities, many manufacturing brands in industries such as consumer packaged goods (CPG), fashion, and equipment have recognized the need to adopt a direct-to-consumer strategy.
Traditionally, these brands relied on resellers to sell their products to end consumers, which meant limited interaction and data ownership. However, with resellers unavailable, many manufacturers have taken the opportunity to build digital experiences that allow them to interface with customers directly, sell products, and collect valuable data.
This shift in strategy has resulted in manufacturers gaining access to data that was previously owned by resellers or intermediaries. Now, they have the opportunity to learn from this data and capitalize on it, opening up new revenue streams by selling the data to other entities or using it to cross-sell or upsell products. Additionally, manufacturers can use this data to create a more seamless and personalized experience for their customers, leading to greater customer satisfaction and loyalty.
However, the collection of consumer data also comes with inherent risks. While most organizations are concerned about the threats of hacking, malware, and data theft, it is equally important to avoid misusing the collected data, as it can damage a brand’s reputation and even create legal exposure.
According to a “Looking Glass” trends report from Thoughtworks, mishandling consumer or employee data can lead to damages that are equal to or even greater than those caused by a cyberattack. The report emphasizes the importance of handling data and information in accordance with evolving regulations and changing expectations to maintain a competitive advantage and foster customer loyalty.
To mitigate these risks, it is crucial for enterprises to proactively create ethical frameworks that guide the use of technology and data. These frameworks should prioritize customer privacy and establish a baseline of respect and security, minimizing harm to consumers. By implementing these frameworks, manufacturers can ensure that their data collection practices are compliant, secure, ethical, and productive.
There are several key actions that manufacturers can take to uphold these principles. First, organizations should carefully consider the data they collect and store, recognizing that data is both a liability and an asset. By collecting and managing less data, manufacturers can reduce the risk of data breaches and leaks.
Additionally, it is essential to adopt decentralized security measures that go beyond traditional boundaries and perimeters. System design should enable risk management and security enforcement across the entire architecture, utilizing practices such as encrypted communications, segmented regions, granular authentication and authorization, and intelligent intrusion detection systems.
Furthermore, leveraging artificial intelligence (AI) capabilities in software applications can help security professionals identify and react to threats, as well as predict potential attack vectors. While automation is not a replacement for trained professionals, it can automate basic defenses, allowing experts to focus on critical threats.
Manufacturers must also anticipate increased regulation in the privacy space and be prepared to comply with new laws and regulations. With an increasing number of data protection laws worldwide, especially for organizations operating in multiple jurisdictions, compliance will become more complex. By staying informed and proactive, manufacturers can navigate these challenges successfully.
Lastly, building products with robust security and privacy practices should be a priority for manufacturers. This requires strong leadership and a commitment to ingraining security and privacy into the organization’s culture. It is essential to emphasize that security is not a nicety or an option but a fundamental aspect of the business. Employees should be trained to prioritize security, with password changes and alert notifications being taken seriously to prevent data breaches.
In conclusion, the pandemic has accelerated the adoption of direct-to-consumer strategies among B2B2C manufacturers. While this offers new opportunities to collect and utilize consumer data, it also presents risks that must be addressed. By implementing ethical frameworks, adopting decentralized security measures, leveraging AI capabilities, anticipating increased regulation, and building products with robust security and privacy practices, manufacturers can navigate these challenges and protect their customers’ data while achieving their business objectives.