Singapore's digital economy is not just growing; it's thriving, reshaping, and innovating at an unprecedented pace. In fact, the overall nominal value-add of the digital economy amounted to S$106 billion in 2022, equivalent to 17.3% of Singapore’s nominal GDP, up from 13% of GDP in 2017, and this number is only set to grow.
At the heart of this transformation lies a discernible shift towards personalisation, driven by consumers' desire for more tailored and meaningful interactions in an increasingly digitalised world. This evolution is reflected in insights among marketers, 96% of whom recognise that personalisation significantly boosts customer loyalty and repeat business. However, this is a stark contrast to how only 35% of them mentioned that their customers received personalised experiences, which evidently shows that businesses need help in providing so.
Hurdles posed by fragmented consumer data
In our digital age, as consumers navigate and interact with various online platforms – such as social networks or e-commerce sites – their activities generate data that gets stored in silos, specific to each platform. This lack of data integration between said silos leads to a fragmented view of the consumer’s behaviour, which in turn, produces challenges such as inaccuracies for businesses trying to gain insights and a full understanding of their customers effectively.
Envision tailoring a suit without taking the client’s measurements is what businesses do when dealing with fragmented consumer data. They are inevitably put in a position where they struggle to tailor their marketing strategies and product offers to their consumers. Using an incomplete dataset results in businesses executing inefficient, misdirected and sometimes costly efforts where personalisation falls short, wasting resources and missing potential opportunities.
If businesses can’t leverage a full, integrated view of consumer data to personalise interactions, the overall consumer experience deteriorates, making them feel undervalued and leaving them dissatisfied and disengaged. On a grander scale, this risks sales and harms brand reputation, leaving businesses handicapped in aspects such as customer retention and acquisition in an already competitive digital economy.
Dependence on third-party data sets
In an effort to bridge the gap created by insufficient internal data, businesses often turn to third-party data, which are purchasable in bundles and contain a broad array of consumer data gathered from various data points across the web – websites, social media platforms, and more. Although businesses may find it worth the investment to acquire such large bulks of datasets to access a wider customer base, this approach, albeit seemingly a quick fix for lead generation, overlooks the crucial aspect of data relevance.
These datasets might open doors to numerous potential customers, but the data within is frequently a mishmash of incomplete information, making them inaccurate, and sometimes outdated - which is counterproductive towards businesses’ strategic progress and can lead to premature damage to the brand’s reputation. The use of third-party data also raises privacy concerns around how this dataset is collected and transacted, typically without direct consent from the individuals, as these data providers don’t have a direct relationship with these individuals.
In today’s digital landscape, trust is king, and the first interaction with customers sets the tone for future relations. Dependence on impersonal third-party data can breach privacy laws and damage the trust that is essential to customer relationships. As the value of personal data control escalates, businesses focusing on ethical, user-centric data practices are poised to establish stronger bonds in the privacy-aware marketplace. This strategic shift is vital; neglecting it risks damaging the customer connections essential for success.
The shift to zero-party data
The term “zero-party data” has gained traction in recent years, particularly due to evolving data privacy regulations and increased consumer awareness. Zero-party data is defined as information that people freely, willingly, and voluntarily want to share. This sets it apart from other types of data such as first-party, second-party, and third-party data, by being sourced directly from consumers. As zero-party data is collected only through the consumer’s consent, the direct relationship between the consumer and business grows trust through transparency, driving deeper consumer loyalty and fostering a more positive and fruitful relationship.
While zero-party data offers a direct line to consumer intentions and preferences, this data on its own could still be incomplete or fragmented. However, with the emergence of decentralised platforms integrated with a Holistic Identity infrastructure, the landscape of data collection, storage, sharing, and monetisation undergoes a transformative shift. These platforms play a crucial role in ensuring the reliability, accuracy, and compliance of data by providing a comprehensive framework for data management. Through the systemic reconstitution of datasets facilitated by such platforms, zero-party data's potential inaccuracies are addressed more effectively, progressively refining the data's quality and comprehensiveness.
Exploring holistic identity and its implications in data exchange
As individuals increasingly interact with today's digitalised world, they leave data footprints all over the web, rendering their data “trapped” within digital ecosystems and exposing businesses to greater risks of security breaches. The Holistic Identity concept seeks to reverse data ownership, shifting it away from centralised platforms and back into the hands of individuals where they can discover, collect, store, share their data securely and in a privacy-preserving manner. In doing so, this provides data owners with a complete 360-degree view of their digital selves, one holistic digital identity, that they can then choose to monetise.
With Holistic Identity, individuals will be digitally empowered to operate in their own interests and have the freedom to choose specific information they want to explicitly share, with whichever service provider, and for whatever value they prefer. Businesses that have integrated Holistic Identity into their technology stack will retain less information about their consumers – only gathering data they need – which drastically reduces the scope of potential breaches and any cybersecurity incidents that would otherwise affect millions of people while ensuring compliance surrounding privacy regulations.
Personal data sovereignty will become the norm as our digital ecosystems evolve towards Holistic Identity, signifying a pivotal departure from the era of centralised data monopolies. Having said that, a comprehensive 360-view of the consumer’s digital self that transcends siloed platforms will only be made possible by whole-of-society efforts from businesses and every individual, with the possibilities of this technology being the catalyst for endless innovations around data management.
Enterprises that provide this level of autonomy will not only revolutionise personal data management, but redefine the fabric of digital interactions, making privacy, personal control, and user-centricity as its cornerstone.
Everyone has a part to play
As consumers increasingly want more ownership and privacy over their data and regulatory bodies start cracking down on privacy laws, businesses who continue relying on third-party data may not only risk legal repercussions, but also the loss of customer trust, which is paramount in today’s digital economy.
The shift to zero-party data and Holistic Identity marks a seismic change in the digital realm, emphasising consumer privacy, consent, and empowerment. Though it is only through community efforts by both businesses and consumers that we can experience the true benefits that abound when true reclamation of data ownership takes place. Unifying zero-party data and Holistic Identity solutions will allow businesses and consumers to develop authentic and privacy-first exchanges. This era of enhanced data sovereignty will grant individuals unparalleled control over their digital personas and cultivate more trustworthy digital ecosystems, paving the way for the further growth of Singapore’s digital economy.
