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Are Consumers Willing to Share Private Data?

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According to a recent survey by the International Data Corporation (IDC), just 14 percent of consumers could be considered "privacy spenders," freely giving their information to retailers. Forty-seven percent are "privacy hoarders" uncomfortable sharing information about their social network activity, mobile app usage, and travel patterns. Thirty-nine percent of consumers are "privacy value seekers," who fall between the two other categories.

The survey was an effort by IDC's Greg Girard, program director for omnichannel retail analytics, to monitor how consumers feel about data channel by channel and action by action. "The question 'Will you trade privacy for relevancy?' is often asked in the abstract," he explains. "Consumers don't know what's going on in the background between the give and the get. And they don't know what they're getting."

Both privacy hoarders and privacy spenders are comfortable with retailers using online purchase data to serve them better, showing little difference in their thoughts about retailers using their activity on a Web site, in-store, or on a store's mobile app. They are far more cautious when it comes to retailers monitoring their online behavior as a whole, whether it's via social media, app usage, or other Web activity.

Girard found that privacy hoarders and privacy spenders have different demographic attributes.

Younger people skew toward being privacy spenders. The group is also made up of slightly more males and tends to have children under 18 in the household.

Since different retailers attract different demographics, retailers need to know how their shoppers feel about privacy. Of people who shop at Walmart, for example, just 10 percent are privacy spenders, while a third of the people shopping at Forever 21 fall into this category.

Retailers with more cautious shoppers should take extra care to avoid being perceived as creepy. In contrast, retailers with more open customers just might have an opportunity to connect with them in a more personal way.

One thing is clear: Consumers will take action if they don't feel that the information they are giving to retailers is adequately protected. In a separate poll, conducted by Radius Global Market Research, 76 percent of Internet users said they are likely to stop shopping at a retailer or stop using a product or service if they feel their privacy is being compromised.

Short of boycotting stores, consumers feel helpless over the information they give to retailers. In the IDC survey, 62 percent of respondents stated they don't have enough control over what retailers could learn about them.

High-profile security breaches have exacerbated the issue. The data breach that struck Target around the holiday shopping season was one blow, but there have been others. The Heartbleed security flaw put many consumers' online data at risk. Reports of the National Security Agency monitoring data from trusted sources such as Google has also made consumers skittish.

Trust is not just individually built with a retailer, but affected by these more "external drivers," Girard explains. The challenge will be "how well retailers individually, and as an industry, exercise the responsibility they have to safeguard their customers' data and to use it correctly to deliver value," Girard underscores.

The need to safeguard data has risen to a C-suite concern for retailers, which traditionally have lagged behind industries such as financial services on privacy matters. "My research suggests that probably only half the retailers in the U.S. have a governance structure in place for how they use data. That creates risk for the half that don't, and it creates a broader industry risk," Girard says.

He advises retailers to treat information like the currency it is, calling it their "fiduciary responsibility" to protect consumer data. "Information is currency. It's valuable to the consumer, and it is the retailer's fiduciary responsibility to maintain the confidentiality of the data," Girard explains.


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