Consumers Strongly Sceptical of Retailers’ Data Privacy

Kees Jacobs, Capgemini

Kees Jacobs, Capgemini

Consumer’s don’t ‘Like’ retail data privacy initiatives. That’s the finding of a new Capgemini Consulting,  report published today. “Privacy Please: Why Retailers Need to Rethink Personalization,” reveals that consumers worldwide are strongly negative about retailers’ privacy initiatives.

The report produced by the global strategy and transformation consulting arm of the Capgemini Group, is based on a social media sentiment analysis of over 220,000 conversations over six months and covering 65 large global retailers that collectively generate revenues of over a trillion dollars. It uncovers the drivers of positive and negative consumer sentiment linked to personalization and privacy initiatives worldwide, highlighting the current paradox that exists between the two.

It concludes that consumers worldwide are strongly dubious of retailers’ privacy initiatives: 93 percent of all consumer sentiment on this subject was negative.

When asked about security and invasion of privacy as key issues, the report finds that the main factors contributing to negative sentiment are data security (76 percent) and intrusive behaviour by the retailer (51 percent). Consumer scepticism grew when trigger incidents occurred, including updates of privacy policies during mergers and acquisitions, or regulatory inquiries into a retailer’s violation of data security policies.

Data collection is viewed as slipping 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)

However, personalization initiatives have been received largely positively across the globe: The report indicates that 80 percent of all consumer sentiment on personalization was positive globally.

However, personalization initiatives have been received largely positively across the globe: The report indicates that 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 seems to elude most, with only 14 percent of retailers 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

Kees Jacobs, Global Consumer Products and Retail Consumer Engagement Lead for Capgemini, said: “The deluge of hacks on retailers’ data and misdirected personalization initiatives are having a dramatic effect on consumers’ trust.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. Capgemini is supporting the work, in collaboration with world leading retail companies and The Consumer Goods Forum, on a defined set of Consumer Engagement Principles that provide guidelines and best practices to safeguard against such issues and help maintain consumer trust.”

A key takeaway from the research is that a blend of trust, transparency and consumer control over data are imperative for a positive customer experience.

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