An exploration of the new California Consumer Privacy Act (CCPA) and how it is a signal among many for companies to further transform their relationship with consumers into a partnership built on trust

Late last year, Sonos acquired a private-by-design AI voice platform called Snips, which acts as an alternative to similar assistants from Google or Amazon by combining localized processing with reduced cloud reliance—in effect, innately protecting users' data while still offering them the seamless experience they desire.

Why the interest in a privacy-first device from the Cali-native consumer electronics company? As you probably heard, the California Consumer Privacy Act (CCPA) went into effect on January first of this year. This new law comprises a range of regs that will deeply affect how businesses can collect information about their customers and employees in the state, with the overall effect of giving those people greater control over and transparency in regard to what kinds of data companies can compile and what for purposes they can use it.

In this article, PSFK research looks at what the CCPA is, how it sits among increasing consumer demand for greater data collection control and transparency, and how brands are responding to these demands, now bolstered by new laws, with innovative offers and transformed experiences that have the potential to benefit all parties.

What CCPA Does, In Brief

Some of the most impactful requirements of the CCPA include the following: granting consumers (who are residents of California) the right to opt out of any data collection on websites, the right to opt out of data sale completely, the right to request exactly what data a company has collected about them, and the right to request deletion of collected data. The act will also require businesses to tell their employees what type of data it compiles about them and for what purpose, and will restrict the sale of data on residents under 17 years of age in various manners.

How Consumers Feel

The gist of the law explained, here's a bit about how people have felt recently regarding collection of their info and how companies are using it, whether to ad-target consumers, inform product design or even build brand experiences. More broadly, consumers are very distrustful of marketing & advertising, with only 3% of surveyed respondents stating that they find the category worthy of their trust (1), and 55% of U.S. consumers feeling unfavorably about personalized ads founded on big data (2). Meanwhile, 79% of adults express concern about how companies are making use of their info (3), and are uncomfortable with devices like microphones or AI assistants collecting data (4).

What's key is that it's not necessarily the collection itself of data that people object to the most, but rather not knowing that it's happening or for what purpose: 73% of consumers would share more more info if brands would be upfront about what they'll do with it (4), and the same percentage of consumers would more likely be open or neutral to data collection when satisfied with a business's policy (5). Moreover, 64% of consumers are interested in personalized recommendations from retailers, with a majority (53%) stating their willingness to share data in exchange for benefits tailored to their needs and preferences (6).

illustration by Ouch.pics

How Brands Are Responding

Considering these insights, the CCPA seems in line with what consumers are concerned about and want control over. Whether in response to laws like California's or more directly in response to consumers' increasing demands, brands are innovating to build the trust and transparency that is expected of them. A recent development includes Verizon Media's debut of OneSearch, a search engine built around offering users privacy by not sharing with advertisers and in many cases not even collecting any personal info—down to details like search history. “We deeply believe in consumer trust and choice, both for our user community and our partners,” said Michael Albers, head of consumer product at Verizon Media, in a press release.

In the fintech space, Mastercard, announced last year its long-term goal to enable innately protected digital identities for every consumer through a charter-based program, stipulating its Principles of Digital Identity for the model as including the following: “Everyone has a right to a digital identity,” “Individuals own their identity and personal data,” and “An individual has the right to keep their digital identity information private.” To help brands more easily integrate principles like these to enable the trust and transparency consumers desire, partnerships are even springing up: The Better Ethics and Consumer Outcomes announced its collaboration with Crownpeak to design custom privacy solutions, supporting companies in not just complying with regs like the CCPA or GDPR, but also doing so in an innate, seamlessly integrated way that enables improved customer experience through privacy by design.

Moving forward, more if not all brands will need to innovate their policies and experiences for integrated privacy—and as the above initiatives demonstrate, this presents not as much a challenge as it does an opportunity for building better consumer-brand rapport to the benefit of all.

illustration by Ouch.pics

Sources:

1 “Consumer Intelligence Series: Protect.me.” PwC, November 2017

2 The Future of Marketing Report. American Marketing Association New York, 2019

3 “Americans and Privacy: Concerned, Confused and Feeling Lack of Control Over Their Personal Information.” Pew Research Center, 2019

4 “See people, not patterns.” Accenture Interactive’s 2019 Consumer Pulse Survey. Accenture Interactive, 2019

5 “Consumer privacy in retail: The next regulatory and competitive frontier.” U.S. Retail Privacy Survey. Deloitte, 2019

6 “Delivering for the new Consumer: The Move To Ubiquitous & Ultra-Personal Shopping.” RILA’s (R)Tech Center for Innovation and Accenture, 2018

Lead image: illustration by Ouch.pics