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Retailers must steer clear of 'creepy' big data applications

Consumers have a lot to gain when their retail companies make the decision to use more big data. Data-driven marketing can help deliver them the products they value most, and fraud prevention technologies can protect them from credit card thieves and other identity-based crimes.

There's a continuum, though. On one end of the spectrum, retailers are making a mistake by using too little data, as they're squandering valuable opportunities to assist their customers. On the other end, there's a problem if they use too much - they risk becoming "creepy."

That's the opinion of Paula Rosenblum, co-founder and managing partner at RSR Research, who recently wrote for Forbes that retailers are on the verge of getting carried away. Especially in the wake of the scandal that unfolded last month between Edward Snowden and the National Security Agency (NSA), people are now leery of the fact that data leaks can come from any source at any time.

Retailers have a lot to gain from using data, but they should only do so in ways their customers are comfortable with. Going behind consumers' backs and snooping into people's private information will have the exact opposite effect - rather than bolster the relationship between vendor and buyer, it will make potential customers skittish and unlikely to become loyal patrons.

Chief information officers in the retail industry are digging into as much information as possible. They're after people's locations, phone numbers and financial records. Even when people have nothing in particular to hide, they don't like this information being exploited, especially by retailers whose obvious goal is to make more money.

Data quality isn't the only problem plaguing the use of big data in retail. Companies need their information to be accurate, of course, but they need to maintain ethical standards as well.