SSI in the Retail Use Case
The advantages of eCommerce are well known. The use of data enables significant advantages in the identification of the user as well as the personalized approach. Driven by the advantages of eCommerce and the achievement of omnichannel, digitization is increasingly pushing into the retail market. Retailers find themselves in a transformation that presents a variety of challenges. These include data collection, data processing and data disposal.
Modernization offers many benefits for the customer. For example, the benefits for the customer include personalized advertising, monetary advantages through bonus programs, and fast payment completion. However, the Verbraucherschutz warns against the retailers’ in-house apps. In many cases, these apps access location information and have access to the microphone. In individual cases, the apps also offer third-party providers based abroad the opportunity to create tracking information.
Data octopus versus corporate values
The data-driven advertising industry is based on the belief that consumers want to see relevant advertising, not mass marketing. Retailers collect a lot of data about consumer behavior in order to create more and more tailored offers. Consumers on the other hand, however, are increasingly concerned about their data and privacy. In the wake of increasing GDPR issues, data protection is becoming more and more of a focus.
Furthermore, as data accumulates, the challenge arises to keep it safe and protect it from theft or misuse. If data is stored centrally, the risk of misuse is higher compared to a decentralized database. The attack surface of a database with millions of data records is reduced to one person and his phone in case of decentralized storage.
SSI as a solution in the customer application
Basically, retailers are interested in getting as much data as possible from the customer. As in e-commerce, this allows a profile of the customer to be created in order to provide the most personalized advertising possible. Data protection and user awareness about the use of data is becoming more and more present. Retailers are therefore looking for solutions in this area.
One possible solution to this problem would be an SSI solution of the customer application. “Self Sovereign Identity” or SSI allows users to completely own and manage their digital identity. The user does not have to rely on third parties to do this. As such, SSI can be seen as a new evolutionary identity model alongside traditional centralized, federated and user-centric identity management. This is in contrast to previous approaches to identity management. Users no longer need to manage their data centrally with governments, their workplace, universities or private companies. The advantage of decentralized storage, as described in the part above, greatly reduces data theft.
SSI offers the possibility to collect data detached from the personal data. This means that it is still possible, for example, to relate shopping behavior to the demographic profile of customers. The advantage is that retailers do not need to create a personal profile of each user.
How can retailers benefit further from SSI?
The application areas for SSI in retail are many and varied, and in some cases open up cross-industry benefits for retailers.
In eCommerce, as well as in retail, there is the problem of verifying the buyer when selling products with an age limit. In doing so, the retailer often unintentionally collects a lot of data about the buyer, such as name, address, date of birth, etc. The use of SSI separates this data from the buyer’s personal data. The use of SSI here separates the age verification data from the personal data. The shopper only submits whether they are over or under the minimum age.
In addition to selling goods, retailers are also increasingly offering mobility services such as e-scooters or bike rentals. The rapid transmission of the required data can be implemented in a privacy-compliant manner and under the control of the customer through SSI.
The use of the technology can also be used across industries. This includes, for example, the forwarding of purchasing data to institutions with shared users. Purchases of healthy foods can be attributed to a fundamentally healthy diet. Health insurance companies, for example, can use this information to classify customers into a more favorable plan.
Should you act now?
Implementing technology early will have a competitive advantage over those who take time to embrace new technologies. By implementing early, you will secure a larger market share. For one, you will benefit from fast processes that increase profit margins. In addition, SSI gives you the benefit of compliance with increasing GDPR and CCPA-like regulations.
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