Consumer privacy

Over a year since the Cambridge Analytica data scandal, consumer privacy is still fresh in our minds. Businesses collect significant amounts of data from consumers and can reap substantial benefits from selling this data to third parties or using it for their own benefits. However, when businesses abuse the information collected from consumers, they breach a fundamental pillar of the consumer-business exchange: trust. With 14% of consumers globally ranking trust as the most important reason for shopping at a retailer, how far is too far when it comes to personal data collection and use?

Personalised marketing: convenient or creepy?

For consumers, personalised marketing communications can be incredibly convenient and most consumers understand that personal data is the price for many ‘free’ services they use. However, consumers do expect to receive economic benefit in return for providing personal information such as coupons and discounts. Content is almost expected to be personalised – 67% of millennials expect brands to adjust content based on their preferences. In fact, personalised advertising is seen to be more informative, entertaining, and even less irritating.

On the flip side, personalisation can become excessive. While it may be convenient to have tailored advertisements, consumers have reservations about what data is collected and how it is used. Eighty-eight percent of consumers indicate it is unacceptable for companies to charge different prices based on personal information such as browsing history. Control of personal data use is also a major concern, with 95% of consumers wanting the option to opt out of information collection or how the data can be used . This is especially the case where data beyond what is needed to deliver the product or service is collected, with consumers uncomfortable with sharing personal information such as phone contacts, message histories, and device ID numbers.

What does this mean for retailers?

It’s simple – a consumer who does not trust you is a consumer who will not buy from you. So be clear about what information is being collected and how it is going to be used – also ensure that this is in a form understandable to consumers, rather than legal jargon. To hear more from industry experts on marketing trust, join ACRS, Deloitte, and Monash Business School for our upcoming breakfast on October 18 where we discuss technology, transparency, and the modern consumer. Visit the event page for more details and registration.