How Companies Are Profiting From Consumer Data & Your Digital Identity

Consumer data and your digital identity are no longer confined to the virtual world of Facebook, Instagram, or Amazon Prime. In fact, with every passing day, the online presence of an average U.S. consumer continues to expand.

From email addresses and phone numbers to shopping preferences and birthdates, companies and data brokers are cleverly compiling these into a valuable data profile. The primary aim? To gain a deeper understanding of consumer needs and desires. The irony, however, is that most consumers are oblivious to this or aren’t given a chance to consent.

“My face is part of the data that’s being captured, my behavior, and all of that gives off many more pieces of information about me, my age, my gender, my ethnicity. And all of these pieces of information can then again be combined together with all these other little tidbits that I’ve been leaving behind from my shopping journey.“

Mitul Jain, Refive founder and CEO, via CNBC

A recent study by the University of Pennsylvania reveals a worrying trend. It found that about 79% of Americans believe they have little say over what marketers can discover about them, a phenomenon now being termed “data fatigue.” It’s the growing sentiment among consumers who are aware their data is being harvested but feel powerless to prevent it. Interestingly, more than half of the participants were unaware of the full potential of what companies can do with their data. Today, this data collection model is transcending beyond the digital space and invading the physical aisles of local grocery stores.

According to R.J. Cross, director of Public Interest Research Group’s Don’t Sell My Data campaign, “Retailers today are doing just about everything they can to get as much information about you as possible, because that’s a whole new revenue stream for them. Almost every single company that you’re shopping at today is in the business of selling your data, and you and your data are their latest product.”

The data brokerage industry is booming. In 2021, it was reportedly worth $319 billion. Forecasts suggest that this figure could skyrocket to over $545 billion by 2028. Traditional business models saw retailers purchasing data from brokers to gauge consumer trends. However, the present scenario sees retailers bypassing the middleman. They are now collecting consumer data directly through mechanisms such as loyalty schemes, location tracking, app usage, and digital receipts.