Fashion must make privacy a priority – WWD

The fashion industry has made tremendous strides in harness technology in recent years. However, the next challenge will not only be to use new technologies for more engagement and sales, but also to protect the privacy of its customers.

Consumers are concerned about their information being shared and sold, and lawmakers at all levels are listening. All signs point to more oversight and regulation, not less, in the future.

For example, lawmakers and law enforcement agencies have flagged Big Tech’s privacy traps for years. But now government officials are doing more than just bemoaning the loss of online privacy rights, as Sephora’s recent $1.2 million settlement with California’s Attorney General has shown. On Aug. 24, California AG announced the settlement with the retailer as part of the state’s ongoing enforcement of the California Consumer Privacy Act. Just two days earlier, the Federal Trade Commission released its Notice of Privacy Rules on Commercial Surveillance and Data Security. The call for public comment is broad and includes 95 questions, ranging from how companies monitor consumers to how the Commission should take into account changes in online advertising and other business models.

As designers opened New York Fashion Week, Washington policymakers hosted two privacy events on September 8 — one at the White House to protect Americans’ privacy and another at the FTC to discuss the commission’s open rulemaking. The result: With fashion’s increasing reliance on consumer data — for personalized shopping, augmented reality, and virtual goods in the metaverse — brands are now doing so at their peril.

Unconvinced? That’s why the fashion industry needs to make privacy a priority in its business operations, starting with a few key points from the FTC’s Privacy Policy.

Data will drive the future of fashion. In the fashion world and beyond, data is a precious commodity – it often influences what people buy, when and how they buy goods or services, and whether they become regular customers. The FTC solicited comments on how companies collect, analyze and monetize various types of data — from a shopper’s geolocation to biometric information used for online retail. This can include consumers’ eye scans or physical facial movements – when they try on makeup, glasses or even clothes virtually. The FTC has also solicited comments on the costs and benefits of collecting certain data (in the age of hyper-personalization) and how the Commission should consider factors that may be difficult to quantify.

Fashion algorithms can help or hurt diversity efforts. Numerous brands have made pledges or pledges following the 2020 America Race Census to improve their organizations’ practices related to diversity, equity and inclusion. However, if an organization’s algorithms discriminate against or bias certain consumers, its DEI claims are meaningless. The FTC has made clear that the Commission’s “Unfairness Authority” is an effective tool in combating discrimination and has invited comments on how the Commission should analyze algorithmic discrimination based on protected categories under the Civil Rights Act. Brands have made algorithms an integral part of their business practices – for product recommendations, chatbots, search and other functions. However, because the data sets are determined by humans, the AI ​​systems can lead to discriminatory results – not recognizing darker skin tones, limiting size options when searching, or marketing products to a certain demographic without taking into account their actual shopping behavior. As the FTC seeks comment on discriminatory algorithms, the fashion industry has an opportunity to share its views on whether the commission should consider new rules.

Fashion brands need to make data transparency a priority. We often hear about the fashion industry’s efforts to be transparent about garment workers and the environment, but there is very little discussion about data transparency – despite the damage caused by unethical and illegal uses of consumer data. The FTC recognizes the potential cost to businesses of investing in data transparency — which may include explaining to consumers how they collect, store, or transmit user data, or even requiring businesses to publicly disclose materials related to self-administered reviews or third-party audits. Many fashion designers work as small businesses and will likely need more resources (including legal and financial) to provide better transparency into their data practices. Smaller brands will have an opportunity to share their views during the FTC’s current privacy rules as the commission considers whether to exempt certain companies from potential disclosure requirements based on their size.

Fashion companies invested between 1.6 and 1.8 percent of their sales in technology in 2021, and that number is expected to rise to 3 to 3.5 percent by 2030 – with investments in more automation and AI analytics. Brands can no longer afford the luxury of prioritizing technology without also considering consumer privacy. These include providing better transparency to consumers, complying with new state laws, and working with federal policymakers as privacy reform gathers momentum in Washington. As the saying goes, “If you don’t have a seat at the table, you probably have a place on the menu.” It’s time for the entire fashion industry – brands and consumers – to take their place and act before the government forces them to act.

The FTC is accepting comments until October 21, 2022.

Kenya Wiley is a Fashion Policy Advisor and Associate Professor in the Masters program in Communications, Culture and Technology at Georgetown University.

https://wwd.com/business-news/business-features/outside-view-data-protection-kenya-wiley-fashion-retail-1235334923/ Fashion must make privacy a priority – WWD

Sarah Y. Kim

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