ACCA Applied Knowledge · Business and Technology · Technological factors
A retailer uses customer purchase data collected through its online platform to recommend products and tailor prices and offers to individual customers. Which of the following is the MOST significant risk specific to this use of technology in its products and services?
The main risk is breaching data protection rules and losing customer trust if personal data is misused or insecure. Personalised offers depend on collecting and analysing customer data, so poor handling exposes the retailer to legal penalties and reputational damage.
- ABreach of data protection requirements and loss of customer trust if personal data is misusedCorrect
- BA reduction in the number of products it is able to sell
- CAn inability to communicate with customers electronically
- DAutomatic exemption from consumer protection law
Explanation
Personalisation relies on collecting and processing personal data, so misuse or poor security can breach data protection law and damage trust. The other options are not consequences of personalisation; it generally increases sales opportunities, uses electronic communication, and does not exempt a firm from law.
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