PARIS—A new study shows that consumers worldwide are strongly skeptical about retailers’ ability to protect their personal financial data, and that retailers are struggling to understand where personalization ends and privacy infringement begins.
Those are key findings from Cap Gemini Consulting’s new report, “Privacy Please: Why Retailers Need to Rethink Personalization.”
The report is based 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 more than 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,” the company said.
Key findings from the report include:
- Consumers worldwide are strongly dubious of retailers’ privacy initiatives: 93% of all consumer sentiment on this subject was negative.
- Security and invasion of privacy are key data issues: The report finds that the main factors contributing to negative sentiment are data security (76%) and intrusive behavior by the retailer (51%). Consumer skepticism 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, the company said.
- Data collection slips into intrusion: Technology perceived as intrusive was met with high suspicion, including in-store traffic monitoring (84% negative) and facial recognition (81% negative).
- Personalization initiatives have been received largely positively across the globe: The report indicates that 80% 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 eludes most: Only 14% of retailers are perceived positively by consumers on both personalization and privacy initiatives. A significant number of brands actively antagonized consumers, with nearly 29% 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.
“The deluge of hacks on retailers’ data and misdirected personalization initiatives are having a dramatic effect on consumers’ trust,” said Kees Jacobs, global consumer products and retail consumer engagement lead for Cap Gemini. “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.”