There is plenty for the modern fashion lover to be concerned about. As if trying to juggle your finances with choosing responsibly made clothes wasn’t tricky enough, a new ethical threat looms over the industry: data privacy.

In the age of fast fashion – where online retailers such as Boohoo and Missguided can offer tops for a tenner and £1 bikinis – high-street retailers are fighting to keep their prices competitive by maximising what they know about their shoppers. This is only made possible, however, by gathering vast amounts of consumer data.

The sales boost delivered by harvesting intelligence on buying and browsing habits was perfectly illustrated in a 2018 McKinsey & Co report. In it, 35% of Amazon’s mammoth global sales were attributed to personalisation strategies. This technique sees retailers collate all the information amassed on registered users to ensure marketing emails and adverts are perfectly tailored to tempt customers to spending as frequently as possible. Big names on the high street are starting to take note.

Stella McCartney: the brand will work with Google Cloud in order to harvest data relating to resources used in material supply chain. Photograph: Daniel Benson/The Observer

Consumer data can be used to predict how many clothes each shopper will buy, meaning companies will be able to minimise waste, making them less likely to incinerate garments in the future. This is technology that H&M is planning to leverage in order to better forecast future collections. It has first-hand experience of what happens when that is done badly: in 2017, it incinerated millions of dollars’ worth of stock before it ever reached a shop floor. While the retailer claimed the clothes were unsellable for safety reasons, the speculation was that the decision was taken simply because the items were never going to sell. It was an environmental nightmare, a PR disaster for the brand and a massive waste of money. In theory, for a global company such as H&M, avoiding a repeat performance could help to maximise profits – and deliver sweeping sustainability gains.

To get the most out of its new venture, H&M assembled a team of experts in the fields of data analytics and artificial intelligence. One such data tsar is Cambridge Analytica whistleblower Christopher Wylie, who has been hired in a consultancy role. Upon his appointment, he explained: “We can’t help people if we don’t know who they are. With the use of data, we can make sure our customers get what they want.” But consumers can already get exactly what they want, they just have to shop around to get it. The real task facing Wylie and the newly formed team is to ensure H&M knows what customers want before their high street rivals do.

While it may seem revolutionary, H&M’s work represents the tip of the iceberg. Google Cloud recently unveiled an unprecedented partnership with Stella McCartney that will see the tech giant gather and process huge quantities of data from the luxury brand’s supply chain. This, to start with, will focus on the use of resources such as water in producing materials such as cotton, but the possibilities of Google Cloud’s data processing are broader: if applied to sales, brands may be able to respond on an almost daily basis to changing customer desires rather than waiting months to plan future collections. This could be a hugely powerful tool in a fashion industry with ever shortening lead times.

While taking a data-heavy approach seems a no-brainer for brands and retailers, consumer appetite for handing over yet more data is understandably mixed – at the thin end of the wedge, who hasn’t grown tired of the incessant requests for email addresses at the checkout? A recent report by market insights specialist Retail Economics claims that while the fashion industry is entering a “seminal decade” in which artificial intelligence and digital traceability will be “fully implemented”, 67% of people do not trust retailers to act responsibly and protect their data. Additionally, half of those surveyed were unwilling to share personal data such as body shape, weight or height to enhance product recommendation accuracy – one of the ideas floated by H&M. And fears aren’t soothed by attitudes in Westminster. Britain’s new prime minister has consistently voted in favour of “mass surveillance of people’s communications and activities”, offering little comfort for those worrying about data privacy.

H&M is planning to leverage data collection in order to better forecast future collections and reduce waste. Photograph: Murdo MacLeod/The Guardian

Consumer scepticism is well placed, according to Lauren Vargas, a digital fellow at the University of Leicester. A specialist in the application of artificial intelligence, Vargas believes the public should be “wary of all companies – regardless of size – collecting and using their data. People need to take responsibility, to be aware of what information they are giving away and what they may be sacrificing in return for their information.” Your favourite fashion haunt almost certainly stores your name, age, address, email, bank details and style preferences – and they may well soon have built up a picture of your body shape and size, in addition to knowing what days and times you tend to shop. But who really wants Topshop knowing more about you than your friends and family do?

Building consumer confidence will be vital for these brands investing in the use of big data analytics. Google Cloud UK’s head of customer engineering, Ian Pattison, acknowledges the need to “govern and curate the data carefully”, but also believes “what each individual retailer and brand does with that [information] is entirely up to them”. He has also stated the company is looking to work with as many fashion brands as possible.Richard Lim, chief executive of Retail Economics, believes that “if retailers and brands cannot build enough trust to capture sufficient shopper information … then the deeper engagements that will help retail experiences thrive over the next decade will be undermined.”