The Hidden Cost of Data Collection: Data Collection Decreases Consumer-Company Interactions

The collection of consumer data has become an essential part of modern marketing practices; yet little is known about how it influences the outcomes of consumers’ interactions with brands. In this research, we demonstrate that the collection of consumer data decreases trust, engagement, and purchase likelihood, impairing consumer-brand interaction outcomes. This effect occurs because the collection of consumer data diminishes the perceived reciprocity of the interaction. Providing monetary or nonmonetary benefits may not effectively eliminate the negative effect of the collection of consumer data since these benefits may not be perceived as reciprocal. However, the effect can be mitigated when reciprocity is clearly specified.