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The serious damage that can result from a large-scale data breach is dramatically illustrated by Target Corp.’s recent experience.
The serious damage that can result from a large-scale data breach is dramatically illustrated by Target Corp.’s recent experience.
During last year’s holiday selling season the discounter discovered that it was the victim of hackers, who succeeded in accessing the financial information of 40 million customers. It was later learned that the personal data of an additional 70 million Target patrons was compromised.
Fallout from the incident has been significant. Target’s customer traffic, sales and earnings have all taken a major hit; chief information officer Beth Jacob and chief executive officer Gregg Steinhafel are out of a job; and the brand equity and consumer confidence built by the company over more than five decades have been badly shaken. And that doesn’t even begin to take into account the impact the incident has had on individual consumers.
The swiftness and severity of the problems that have engulfed Target should prompt all mass market retailers to reassess how they interface with customers and business partners in the digital age. A report by the World Economic Forum and consulting firm A.T. Kearney can serve as a starting point for that work. The latest in an annual series, "Rethinking Personal Data: A New Lens for Strengthening Trust," explores growing public concern about the collection and use of personal information, and suggests ideas about how to balance the very real benefits of mining data and the rights of individuals.
"There is a crisis in trust," states the report’s executive summary, a view certainly shared by many Target customers. "Tools are needed to answer fundamental questions: Who has the data? Where is the data? What is being done with it? All of these uncertainties need to be addressed for meaningful progress to occur."
The authors call for an international dialog that involves everyone with a stake in the use of personal data to develop a set of guidelines that ensure meaningful transparency, bolster accountability and empower individuals. One of their more proactive recommendations is that businesses do a better job of sharing the value created by using personal data.
Mass retailers, whose operations are increasingly dependent on technology and the information it yields, should comprehend the promise and peril of big data. To do otherwise is to court the kind of trouble that has hobbled Target, trouble that may take many years to fully overcome.
