In the age of AI, data security is top of mind for consumers

With rapid advances in AI, people tend to worry—or sometimes panic. The ethical implications of AI in retail can often feel daunting and challenging to tackle, and the path forward—for both customers and retailers—isn’t always clear. But more sober-minded retailers need to understand and work to protect what most consumers are really concerned about: data security.

While data security is nothing new, the growing use of AI across every industry amplifies how necessary it is to protect customer data. And if retailers want to take advantage of the powerful headless commerce model, they need to ensure that they’re prioritizing the topmost concerns among consumers.

Data security will be mission-critical as the use of AI grows more prevalent.

As the number of viable business use cases—and thus benefits—of AI in retail grows, so too do challenges and risks. Customer concerns become retailer responsibilities, of which tight data security is top of mind. Avoiding data breaches amid increases in cybercrime will be ever more paramount to companies that want to keep consumers happy.

Businesses are gathering vast and increasing amounts of data while expanding their capabilities with powerful AI. But they’re also mining this data for highly specific insights relevant to almost any required use case. This highlights the growing potential of large language models (LLMs) of which retailers can take full advantage—so long as they properly position themselves. Data equals power, so it has to be the right data.

Data breaches have always been a concern for retailers, but AI increases the risk level. Both retailer—and third-party vendor— LLMs need rigorous safeguards to protect against data breaches. Large amounts of data generated by LLM prompts shouldn’t be shared with outside parties, often including software providers.

Additionally, retailers need to be prepared for the implications of AI hallucinations—when the technology fabricates information under the guise of truth. AI hallucinations can pose a range of problems: from misleading a customer with poor product recommendations to prompting returns and exchanges despite a transaction not meeting a company’s return policy qualifications.

Software providers and retailers that rely on AI must both assume full responsibility for how these features impact customers.