Privacy Concerns Key Reason Buyers Flee Online Retailers

Consumers would rather avoid brands than compromise personal data, according to new research. Brands that handle consumer data transparently and ethically, however, will be best positioned to navigate and engage with this cautious consumer base.

Shopper discontent with online retail sites is localizing to two major concerns. Spoiler alert: customer experience per se is not in this ranking. It is the need for caution that prominently leads shoppers to abandon their shopping carts.

Consumers’ reliance on online shopping has forced greater emphasis on caution when providing brands with personal data. Results of a recent survey of more than 1,100 respondents conducted by marketing technology firm Wyng released Tuesday confirmed that reality.

The “Wyng 2021 Report: State of Consumer Data Privacy,” revealed that consumers would rather abandon purchases or entirely avoid brands that do not offer assurances of protecting buyers’ personal information.

Higher Bounce Rates

First it was Qubit’s research suggesting that retailers may not be fully prepared to handle the expected increase in online shopping and new consumer mindsets. Failed expectations often cause shoppers to bounce to competitors, that study found.

Now, Wyng’s study shows great shopper ties to privacy concerns leading to cart abandonment. It disclosed that 70 percent of consumers abandon purchases due to privacy concerns.

It’s well documented that consumers are growing more concerned about privacy. Wendell Lansford, co-founder of Wyng, said he was not surprised that 80 percent of people said that protecting data and maintaining privacy online was “very important” to them.

“What surprised me is that 70 percent of those people said they have abandoned purchases because they did not trust the way their data would be handled. That is a serious wake up call for any marketers or merchants not yet taking privacy seriously,” he told the E-Commerce Times.

The remaining 20 percent claimed it was still “somewhat important.”

Report Highlights

Consumer awareness about data privacy has grown for a number of reasons: high profile breaches, increased legislation, and tech giants drawing lines in the sand, according to the report. However, Wyng’s research reveals more than just awareness. There has been a tangible shift in buying habits based on how brands handle data.

The consensus among the Wyng survey respondents showed that privacy is personal to each individual consumer. They deem certain identifying information more sensitive. Survey takers said it was important to maintain privacy for individual identifiers.

Respondents tended to value everyday touchpoints. Perhaps due to the recent rise in robocalls, 83 percent felt more protective over their phone number than any other point of identification.

The same or greater percentages tallied for identifiers indicating location, email addresses, online searches performed, and biometric features such as voice patterns and facial features.

More than 60 percent of respondents said they would share more personal data with an e-commerce site if the site made it easy for them to see the data they shared. Those respondents said they also wanted sites to let them update or revoke their personal information whenever they want.

Other Factors

Transparency is essential for consumers when offering their personal data to brands. That transparency can have long-term impact.

For instance, more than 70 percent of respondents would feel more comfortable interacting with a brand online that did not sell their personal data to third parties. About the same amount of respondents acknowledged they would feel more comfortable if the brand asked them for their consent before collecting any personal data.

Approximately half of the respondents agreed they would feel more comfortable engaging with a brand if asked for preferences to personalize their experience rather than guessing based on their website activity.

Some Disconnect Found

According to the survey, one-third of the responding consumers claimed they do not read privacy policies and more than 30 percent give apps or websites permission to collect their data. Sixty-seven percent claimed they avoided websites whose data and collection practices felt intrusive, and 57 percent avoided downloading apps to get out of sharing permission to collect their data.

Marketers and merchants absolutely are becoming more mindful of such rising reactions by consumers over privacy concerns, noted Lansford. His company has been working with brands and retailers on privacy-first data practices since GDPR went into effect in 2018. Early movers then were the company’s customers in the U.K. and EMEA.

“Over the last 12 months, however, our North American customers have gotten deadly serious about privacy. Beyond privacy regulations, Apple’s recent move to give consumers more transparency and control over their data — for example, with the App Privacy Report, Hide My Email, and Mail Privacy Protection features in iOS 15 — is a real factor,” he added.

Next Step: Future Proofing

Marketers and merchants are in the privacy-first era now. Collecting zero-party data to deepen relationships, give consumers transparency, choice, and control is the way forward.

“Brands must eliminate their dependency on third-party data and invest in zero-party data and first-party data instead,” he suggested.

Even first-party behavioral data has its pitfalls, since it is collected in ways that consumers do not know and is used in ways that consumers do not expect. Zero-party data is the true gold standard.

“Because customers have full transparency and control over zero-party data, it gives brands a future-proof foundation for their data strategy,” he added.

Report Recommendations

In an increasingly cautious consumer landscape, the brands that offer consumers a clear value exchange for their personal data will be best positioned to succeed in the long term, the report concludes.

Brands need to rebuild consumer trust with transparency and control over their personal data. Additionally, brands must give assurance that the consumer’s data will be safeguarded and not shared or sold. That will both help brands avoid cart abandonment and short-term pitfalls and can help brand trust over time.

Finally, brands must leverage zero-party data efforts to customize experiences without abusing consumer trust. That can support their consumer data efforts while simultaneously preserving consumer privacy.

The complete report from Wyng can be viewed here.

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Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.