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Consumers doubt retailers on privacy

News, 28 October 2015

PARIS: Retailers are struggling to understand where personalisation ends and privacy infringement begins, with consumer sentiment worldwide on their privacy initiatives being overwhelmingly negative.

A report from Capgemini Consulting – Privacy Please: Why Retailers Need to Rethink Personalization – was based on a social media sentiment analysis of more than 220,000 conversations over six months covering 65 large global retailers that collectively generate revenues of over a trillion dollars.

The difficulties retailers face were highlighted in two separate figures: 93% of all consumer sentiment on retailers' privacy initiatives was negative, but at the same time 80% of all consumer sentiment on personalisation was positive.

Striking a balance between these two conflicting attitudes proved elusive for most, with just 14% of retailers perceived positively by consumers on both counts.

Security and invasion of privacy emerged as key data issues that have to be addressed. The report found that the main factors contributing to negative sentiment are data security (76%) and intrusive behaviour by the retailer (51%).

Part of the problem is the apparently endless flow of new technologies that promise greater effectiveness and efficiencies to retailers. An enthusiasm for data collection for the best of reasons can all too easily slip into something consumers regard as more sinister.

Technology perceived as intrusive, for example, was met with high suspicion, including in-store traffic monitoring (84% negative) and facial recognition (81% negative).

A significant number of brands "actively antagonised consumers", noted Capgemini, with nearly 29% of retailers leaving consumers dissatisfied with both their personalisation and privacy initiatives. Intrusive loyalty programs, excessive promotional mails, poor in-store service, or confusing opt-in/opt-out instructions were among the commonly cited factors.

Consumer skepticism also 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.

Kees Jacobs, Global Consumer Products and Retail Consumer Engagement Lead for Capgemini, observed that "the deluge of hacks on retailers' data and misdirected personalisation initiatives are having a dramatic effect on consumers' trust".

Digital shopping and big data analytics "promised a golden age for retailers", he added, "but many of the world's largest brands are finding the reality of safeguarding and properly utilising this precious information very challenging".

Data sourced from Capgemini Consulting; additional content by Warc staff