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Retailers failing to halt suspicion over data privacy

LONDON - DECEMBER 23: Shoppers make their way along Oxford Street on December 23, 2006 in London, England. With just two days to go before Christmas, the streets are busy with people as they are finishing their last-minute Christmas shopping. (Photo by Scott Barbour/Getty Images)

Retailers have been warned they face a massive battle to win customers’ trust after a report published today found that an overwhelming majority of shoppers harbour concerns over data privacy issues.

The study from Capgemini Consulting reveals that 93% of all consumer sentiment was negative when it came to retailer privacy, with data security and intrusive behaviour the key drivers of pessimism.

It based the results 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.

The company said that consumers worldwide remain “strongly dubious” of retailers’ privacy initiatives, with data security (76%) and intrusive behaviour by the retailer (51%) bothering shoppers the most.

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. Technology perceived as intrusive is also met with high suspicion, including in-store traffic monitoring and facial recognition.

In contrast, personalisation initiatives undertaken by retailers across the globe have been largely well-received, although the sentiment remains much higher in North American than Europe.

But striking the balance between privacy and personalisation eludes most retailers, concludes Capgemini. Only 14% percent of retailers are perceived positively by consumers on both personalisation and privacy initiatives.

A significant number of brands also “actively antagonised” consumers, with nearly 29% of retailers leaving consumers dissatisfied with both their personalisation and privacy initiatives, largely due to intrusive loyalty programmes, 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 that a blend of trust, transparency and consumer control over data is imperative to customer experience.

“The deluge of hacks on retailers’ data and misdirected personalisation 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 utilising this precious information very challenging.”


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