5 Benefits of Data Collection for Consumers

5 Benefits of Data Collection for Consumers
Companies are collecting your data for their own personal gain, but how does that benefit you as a consumer? Here’s 5 ways you’re benefiting.

You were right – Big Brother is watching you, but he might also be looking out for you. In our data driven economy, people are growing increasingly conscientious about who collects their personal data – and for what purposes. And, while exercising caution and autonomy will always win first prize, we should take care not to overlook the benefits of data collection for consumers. 

When it’s done with transparency and informed consent, the exchange of data for improved products and services is a mutually beneficial arrangement for both company and consumer. It’s pretty clear what the benefits of data collection are for a company’s marketing strategy, but what we’re really interested in in this article are the consumer benefits.

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Why is collecting information important to customers?

Data collection is an important consumer issue because it is related to general data protection and privacy concerns. Most of us know that our data is already being collected and shared by the sites we visit. Even when the chief purpose of this data collection is to improve products and services, there is an understandable level of uneasiness that comes with being watched.  

This is because, in most cases, the companies who are collecting their consumers’ data tend to be opaque about what data they’re collecting and what they’re going to use it for. Sure, we’ve all received a pop-up disclosure notifying us that the site we’re on uses cookies. Some of us – some – even go the extra mile to adjust the cookie permissions on the sites we browse. But disclosure is not enough any more. If we’re going to enter into a mutually beneficial data economy, companies actually need to educate users about what they’re doing with their data. 

Ultimately, data collection is important to consumers because we have a right to privacy. Many consumers are concerned that covert data collection could result in businesses and governments misusing their data, credit card cloning, or identity theft. But, most of all, most folks just want to maintain their privacy online. 

Data collection and privacy are important to consumers, but do you know what kind of personal data you’re sharing with the sites you visit and the companies you interact with? According to the Harvard Business Review, most consumers are sharing the following information: 

  • Your friends list from your social media platforms. 
  • Location. 
  • Web search history. 
  • Communication history, such as chat logs. 
  • IP addresses.

The more you know, the better. 

How are customers feeling in general about data collection in the world?

Generally, customers feel fairly suspicious of data collection – but that could change if companies become more transparent about what data they’re collecting and what they’re using it for. According to the nonpartisan fact tank, Pew Research Center, most Americans feel as though they have little or no control over how certain entities use their personal information. Roughly eight-in-ten US adults say they have very little control over the data that the government (84%) or companies (81%) collect about them. 


We saw the peak of this suspicion in the recent TikTok case heard at Congress, where the social media platform’s CEO Shou Zi Chew faced five grueling hours of questioning. Lawmakers chewed Chew out for TikTok’s possible relationship with the Chinese government. Chief among their concerns was that TikTok’s parent company, Bytedance, might be sharing consumer data from US users with the Chinese government.


If the line of questioning taken up by Congress is anything to go by, there are concerns that China’s authoritarian regime could leverage the popular app (which is used by approximately 150 million Americans for ninety minutes every day) to spy on or blackmail US consumers. Chew maintains that TikTok is “free from any manipulation from any government.” 

Nevertheless, the Biden administration declared that if its Chinese owners didn’t sell their stakes in the app to a US company, it would face being banned. TikTok responded with an alternative solution called “Project Texas”, which would essentially see all US TikTok user data stored with software company Oracle in Austin, Texas. “The bottom line is this: American data stored on American soil, by an American company, overseen by American personnel,” said Chew of the $1.5 billion proposal. 

If the TikTok case reinforces anything we already know about data collection, it’s this: it all comes down to trust. It’s not as if customers don’t trust or benefit from data collection at all. It’s just that they aren’t confident that corporations are “good stewards” of the data they collect. But, when data collection is conducted with security and transparency (as Project Texas would supposedly achieve) or when it’s used for the greater good, most people are willing to share insightful information. 

For instance, the Pew Research Center study also found that more Americans find it more acceptable than unacceptable for poorly performing schools to share data about their students with a nonprofit group seeking to improve educational outcomes by a 49%-27% margin. Similarly, 49% conceded that it was acceptable for the government to collect data about all Americans to assess who might be a potential terrorist threat compared to 31% who felt it was unacceptable to collect data for that purpose. 

Data collection can yield positive results for both communities and individuals – it just depends on how transparent companies are about how and why they’re collecting customer data. After all, there are significant benefits of data collection for consumers.

How does data collection benefit customers?

We’re just starting to see the potential benefits that data collection has for customers. Data collection improves the customer experience, saves shoppers time and money, reinforces security in online transactions, and has even been used to create innovative healthcare solutions. Here are five benefits of data collection for consumers.

Benefit 1: Improving the customer experience

Marketers can use patterns of customer behaviors to determine what kinds of products and services you’d be most interested in before you’ve even shopped at a store. Imagine walking into a brick-and-mortar store to be greeted by an attendant who already has a clear idea of what you want, what color you want it in, and what price range you’re looking at. By giving the companies that you buy from some insight into what you like, need, and want, you’re allowing them to create a personalized experience for you (and only you). 

A really strong example of where this works well for consumers? Spotify Wrapped. For users of the music streaming service, receiving their annual Spotify Wrapped playlist is a highlight of the year. Plus, it has the practical outcome of automatically compiling all the music you like the best into one, easy-to-access playlist.

Benefit 2: Healthcare solutions

Our devices are effectively becoming an extension of ourselves – and sometimes our bodies. As data analytics become increasingly sophisticated (think of things like sensors, biometric authentication, and real-time alerts), healthcare professionals are equipped to make life-saving interventions in real time. 

For example, Medtronic’s digital blood-glucose meter wirelessly connects an implanted sensor to a device which then alerts patients and healthcare professionals when blood-glucose levels are nearing the danger zone. This facilitates proactive rather than reactive healthcare, which is safer and more effective. The same data analysis techniques can be used for preventing heart attacks and strokes or recognizing and neutralizing a pandemic.

Benefit 3: Improved transactional security

Consumer data analytics are regularly used to prevent fraud in industries like insurance, financial services, and telecommunications. If you’ve ever received a notification from their credit card company about a suspicious transaction, you’ve experienced one of the benefits of data collection for consumers. It’s the same data that companies are using to assess your spending habits and give you special offers.

Benefit 4: Saving you time 

One of the more obvious benefits of data collection for consumers is that it makes things a lot more convenient. Virtual assistants like Alexa and Google Nest can optimize our home routines by automatically adjusting the thermostat and switching on the lights according to our personal rhythms. 

The benefits don’t end at the front door. Uber agreed to share ride-pattern data with the city of Boston so that officials could improve transportation planning and prioritize road maintenance with as little disturbance to the public as possible. Data collection can also lead to automated prescription refills, upcoming service reminders, and product recommendations based on past purchases and search history – the kind of targeted marketing campaigns which facilitate a seamless shopping experience. 

Benefit 5: Saving you money

The concept of the coupon has existed for years, but special offers can be improved by collecting customer data and putting the consumer’s desire first. Plus, targeted advertising directs consumers to the kinds of products and services that they’re interested in at precisely the right time that they’d want to know about them – when they’re shopping.

We’ll only truly start seeing the benefits of data collection for consumers when we rethink the data economy

Given the many benefits of data collection for consumers and companies, neither party is inclined to stuff that genie back in the bottle. And we don’t have to – but consumers shouldn’t be left in the dark about how their data is being put to use. 


The value of consumer data is clear, but there’s a better way to exchange it: starting with total transparency and active consent from the consumer. Companies are already collecting your data to optimize the products and services they offer you; what if you had more agency in what data they collect, and what you get in exchange for it? 

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