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10/28/2015

Consumers Skeptical of Retailers’ Data Privacy Initiatives: Study

Consumers worldwide are strongly negative about retailers’ privacy initiatives, says a new study that uncovers the drivers of this sentiment.

The study from Capgemini Consulting points to the need for retailers to balance personalization and privacy infringement. The report is based on a social media sentiment analysis of more than 220,000 conversations over six months and covering 65 large global retailers that collectively generate revenues of over a trillion dollars

Key findings from the report include:

  • Consumers worldwide are strongly dubious of retailers’ privacy initiatives: 93 percent of all consumer sentiment on this subject was negative.
  • Security and invasion of privacy are key data issues: The main factors driving negative sentiment are data security (76 percent) and intrusive behavior by the retailer (51 percent).
  • Data collection slips into intrusion: Technology perceived as intrusive was met with high suspicion, including in-store traffic monitoring (84 percent negative) and facial recognition (81 percent negative),
  • Personalization initiatives have been received largely positively across the globe: 80 percent of all consumer sentiment on personalization was positive globally. But there are some discrepancies across regions – North America is positive about retailers’ personalized offers, while Europe displays a mixed sentiment.
  • Striking the balance between privacy and personalization eludes most: Only 14 percent of retailers are perceived positively by consumers on both personalization and privacy initiatives. A significant number of brands actively antagonized consumers, with nearly 29 percent of retailers leaving consumers dissatisfied with both their personalization and privacy initiatives, largely due to intrusive loyalty programs, excessive promotional mails, poor in-store service, or confusing opt-in/opt-out instructions.

“The deluge of hacks on retailers’ data and misdirected personalization initiatives are having a dramatic effect on consumers’ trust,” said Kees Jacobs, global consumer products and retail consumer engagement lead for Capgemini. “The advent of digital shopping and big data analytics promised a golden age for retailers, but many of the world’s largest brands are finding the reality of safeguarding and properly utilizing this precious information very challenging.”

The report urged retailers to address associated privacy and personalization challenges, including the importance of being transparent with how and when they will use customer data. What is needed is a blend of trust, transparency and consumer control over data.