Globalization, Privacy Are Top Issues

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Two major database trends will affect us in 2001: globalization and efforts to enact privacy legislation.


Globalization. While we American marketers have given little thought to building a database of worldwide customers or prospects, the rest of the world has been wondering when we're going to get it. After all, it's been centuries since Europeans first learned how to market outside their homelands.


The time is now. If U.S. marketers want to find new sales revenue, the rest of the world is waiting. The Internet has brought American companies closer than ever to households around the world. Foreign consumers have been giving us their names and addresses on our Web pages for years.


Here's a look at our international online marketing potential.


• Canada: In 2001, Canadian online consumers are expected to shop in broader categories than ever before. The most popular Canadian online shopping categories, according to actual purchasers in the category over the past 12 months, are: computers, 46 percent of shoppers; books, 45 percent; CDs/recorded music, 34 percent; tickets/reservations, 26 percent; clothing, 25 percent; consumer electronics, 17 percent; toys, 17 percent; and videos, 13 percent. With tariffs changing and customers willing to spend more for products that are not readily available at their local retail outlets, Canada could be a gold mine for U.S. online retailers, not to mention online services such as banking or stock trading.


According to Canadian Facts, a division of CF Group Inc., 20 percent of all Canadians have signed up for Internet banking, double the figure of a year ago. Among registered users, 59 percent reported that they click on their accounts at least once a week, while 77 percent said they usually bank online at least once a month.


• United Kingdom: UK residents have long been willing to buy goods from outside their borders.


During the third quarter of 2000, an average of 7.8 million households were able to access the Internet. This figure represents 32 percent of all UK households and is more than three times the number of households that could connect to the Internet two years earlier, according to the Family Expenditure Survey and the October National Statistics Omnibus Survey.


• Hong Kong: More than 36 percent of Hong Kong households have Internet access, according to a survey by Hong Kong's Census and Statistics Department.


• Australia: Overall, 53 percent of Australian households reported owning a home computer, up from 48 percent last year. The proportion of households with Internet access rose from 23 percent in 1999 to 34 percent in 2000.


Prediction 1. This will be the year that American marketers wake up and begin preparing their databases and Web pages to accept foreign addresses and start developing lists of international prospects. However, to do this effectively, U.S. marketers must consider many issues, not the least of which are personal naming protocols and the multitude of street, city, state and country address conventions.


Privacy. Privacy laws for both offline and online consumers are expected to race through Congress in 2001. Already the government has made agreements with the European Union to set certain standards for database information.


Companies that hold personal, medical or financial information will be under greater scrutiny. Requirements will be set for any company holding information that only certain information can be made available to direct marketers. Third-party marketers will be able to use information for research and to evaluate key customers but will not be permitted to make this information available for private use.


Enterprisewide firms that hold financial behavior and transaction data will not be able to share such data among their divisions. This will create more silos of data that cannot be put into any customer relationship management systems.


The Federal Trade Commission is proposing new interpretations of the Fair Credit Reporting Act to implement rules that would give consumers greater control over how their personal financial data are shared with third parties. Top among these new interpretations is a proposal that would require banks, financial institutions, insurance and securities firms to obtain a customer's written permission before they could share nontransactional data.


The opt-in will become the standard, thus putting an increased burden on third-party data collectors to keep their data files up-to-date.


Prediction 2. During 2001, Congress will enact laws to protect the consumer from the growing accumulations of data in independent databases. We will see more restrictions on who can handle consumer information. Rules will be applied to opt-in and will require those companies holding nonpublic information to make it available to consumers at their request.


• Robert McKim is president of MS Database Marketing, Los Angeles. His e-mail address is rmckim@msdbm.com.
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