The Challenges and Opportunities of Customer Data Sharing

May 16, 2023 11:00:00 AM
8 min read

Person with computer chip brainIn today's digital-first era, data has become an alluring asset for e-commerce businesses. Shoppers are keepers of valuable information like demographics, browsing behavior, and purchase history. Gathering these insights enables retailers to make educated decisions that empower them to better serve their customers.

The discussion on whether to share this data has become an increasingly important topic, particularly with the exit of third-party cookies slated for 2024. In e-commerce, customer data sharing is usually done to enhance the customer experience through personalized recommendations, tailored email campaigns, and customer support. While sharing this type of data maximizes its value, it comes with its own set of challenges. The question remains, is leveraging customer data worth its advantages, or better left to the eyes of your e-commerce store only?

In this article, we’ll discuss some of the top opportunities and challenges of customer data sharing for online businesses, along with some best practices to minimize potential risks.

Top Customer Data Sharing Challenges

Data Privacy & Security

One of the biggest concerns e-commerce businesses have when sharing customer data is ensuring it remains confidential. While most consumers are concerned with data privacy, 80% will happily trade their personal info for a good deal. Online retailers collect and store this information, which opens the door to data breaches from sneaky cyber attackers. The more you integrate with third-parties to better understand your customer data, the higher the chances for unauthorized assailants to access it.

Privacy badge with lock on it On average, a cyber attack takes place every 39 seconds. For e-commerce businesses, a data breach can be costly in more ways than one. To avoid major data infringements, make sure to have strong security measures in place to protect your customer data from falling into the wrong hands. These safety protocols should include encryption, firewalls, access controls, and intrusion detection systems that are monitored and updated regularly.

Regulatory Compliance 

Today, 137 out of the world’s 194 countries have legislation to secure the protection of data and privacy,  governing how businesses gather, use, and share personal information. These regulations require any business to obtain irrefutable consent from individuals before collecting and utilizing their data.

Businesses also need to provide full transparency about their data practices and allow their customers to request access to their information or have it removed. Violation of these regulations often leads to legal and financial reprimands–plus a whole lot of damage to a brand’s reputation.

Poor Data Quality 

Online retailers rely on customer data for everything from marketing strategies to sales efforts to managing inventory. If the data is incorrect, it can lead to blunders in your e-commerce operations that result in lost revenue and unpleasant customer experiences.

Pie chartTo ensure data quality, use data analytics tools to gain insights into customer behavior and preferences. You’ll also want to implement data quality processes such as data cleansing, data validation, and data enrichment, which can help you detect (and fix) any inaccuracies and assure data is current and consistent.

Related: How to Make Instant, Data-Driven Business Decisions 

Data Integration

With a variety of sources such as social media, website analytics, and CRM
, integrating data across platforms can become a perplexing process requiring a plethora of tools and considerable expertise. Throw in mismatched data formats like text, images, and videos, and unique fields and data strings, and it may feel impossible to gather information in any way that sounds remotely simple. If that isn’t quite enough, other e-tail partners may not use the same programs you do, making the ability to share data seamlessly nothing short of complicated. 

Two hands shakingTo prevent hassles when consolidating or sharing data, you’ll need to invest in software that enables you to collect, store, and analyze data from different sources and formats. A Customer Data Platform (CDP) is a great tool to help you connect all of your systems together to make data sharing possible—and a lot easier. 


Data sharing can be expensive. To share customer information securely and efficiently, you’ll likely have to allocate part of your funds for adequate infrastructure, which can quickly add up. On top of that, potential legal costs can really set your e-commerce businesses back if you fail to take the necessary steps to protect your customers’ information. 

Stack of coinsBefore jumping in head first, consider the costs of data sharing carefully to see if they outweigh the benefits. If you decide to proceed, you can manage any associated expenses by investing in the right technology, enforcing mandatory data-sharing procedures, and following the regulatory compliance for your region.

Top Customer Data Sharing Opportunities

Advanced Data Analysis 

Compiling and sharing customer data brings a lot of value to online businesses. Primarily it allows you to understand your shoppers better by giving you a complete picture of their behaviors, preferences, and purchasing patterns. In turn, you’ll be able to make smarter decisions across your business operations.

You’ll also help other business partners gain insights that can improve their ventures and build trust with your brand. Just make sure to follow all the privacy protocols mentioned earlier. (We’ll remind you one more time, later on!)

Delightful Customer Experiences

Happy shopper carrying shopping bags. A speech bubbles above shows a thumbs up, conveying them expressing satisfaction.Customer data sharing eliminates any guesswork about what your customers want and increases your ability to tailor content based on specific shopper behaviors. By analyzing customer data, you’ll be able to provide personalized product recommendations and promotions, which are proven to appeal to 90% of consumers in the United States. The happier your customers, the higher the chance for return visits—and larger average order values.

Data sharing also improves your customer support services by enabling you to better understand the needs of your shoppers. And if that isn’t enough, it speeds up checkout by reducing the number of steps required to complete an order.

Related: 5 Shopper Intent Techniques to Delight Your Customers

Optimized Workflow

Data sharing also impacts productivity across all teams. How? Let’s break it down:

  • It saves time and reduces human error by eliminating the need manually to search for data. 
  • It helps identify areas in need of improvement throughout your e-tail business, including checkout, customer support, and supply chain management.
  • It reduces redundancies by updating stakeholders on what already exists.
  • It leverages everyone’s collective knowledge by having information available to anyone who needs it.
  • It saves time by automating processes and reducing the need for manual entry.

Together, these changes equate to fewer inefficiencies throughout your business. 

Related: 8 Ways E-Commerce Companies Can Do More with Less


Data sharing can bring valuable rewards like customer trust and increased efficiency, but it will take some work on your end. When sharing customer data with others, always be as candid as possible. Some areas to focus on include:

  • Getting opt-in consent from customers before collecting and sharing theirMagnifying glass data.
  • Having a clear privacy policy that’s accessible to customers and clarifies how data is amassed, used and distributed.
  • Providing shoppers with access to their personal data, which they can view, update, or request to be deleted.
  • Enforcing proper data security measures to protect customer data, as mentioned earlier in this article.
  • Being truthful about any data breach that transpires by informing customers immediately about what was affected and the actions you’ll be taking to resolve it.


Two people chatting, with a lightbulb between them, suggesting they've had a good ideaLast but not least, sharing customer data can lead to exciting opportunities to work with other industry-related business partners. It also helps your internal team members work together more effectively by removing time-sensitive obstacles that get in the way of collective brainstorms.

Here are some ways data sharing paves the way to joint venture possibilities:

  • It gives you the chance to partner with other e-commerce-related businesses to create collaborative, tailored marketing campaigns or promotions that help you to reach a wider audience.
  • It lets you modify existing products or services based on customer insights, which can lead to new revenue streams and increased customer engagement.
  • It provides an opening to partner with suppliers, manufacturers, and other stakeholders to develop new products or ways of doing business that better meet your customers’ needs and preferences.

Best Practices Recap

We’ve mentioned some of this already, but thought we’d give one last recap on how to maximize the opportunities for sharing customer data while also minimizing any challenges.

Locked lockDevelop clear data-privacy policies.

These policies should clearly outline who can access the data and how to share it, and should be communicated to all employees and relevant stakeholders.

Secure all customer data.

This can be achieved by implementing strong security measures such as encryption, firewalls, and intrusion detection systems that work in conjunction with your privacy policies and any regulatory compliances.

Be responsible.

Use customer data for its intended purpose only and not in ways that harm or
violate their privacy.

Ensure data is always accurate.

Use data analytics tools such as data cleansing, data validation, and data enrichment, to ensure the data you share is up-to-date. 

The Power of Sharing

Two shoppers hi-fiving Customer data sharing presents both challenges and opportunities for e-commerce businesses. On the one hand, you face serious risks that could jeopardize your customer’s privacy, costing you money, credibility, and lost revenue. But with the right approach, data sharing can be a powerful tool that helps you deliver personalized experiences that engage shoppers, build loyalty, and drive sales.

The secret is to find a way to balance the pros and cons so that both you and your customers benefit, all while adhering to the highest level of privacy protocols that ensure data remains protected.

Leverage Your Customer Insights

Person gaining machine learning insights with binocularsGranify's AI-powered machine learning technology provides real-time customer insights to create personalized recommendations. Our innovative Product Spotlights are proven to improve conversion rates, reduce cart abandonment, and elevate each shoppers online shopping experience. Connect with one of our experienced sales team members to discover how you can take your customer data to the next level.

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