VP Marketing | TRUSTe
Online retailers were predicted to benefit from a $43.4 billion holiday sales season as shoppers increasingly relied on social networks and mobile devices to find and buy merchandise. Online sales also grew strongly outside the US, accounting for 10% of all retail sales in Great Britain last December according to the British Retail Consortium with the biggest area of growth on mobile devices.
However consumer trust remains fragile and new TRUSTe research to coincide with Data Privacy Day #DPD2013 shows ongoing concerns about privacy and the ability to protect personal information online.
The research findings in the US and Great Britain were similar with both revealing that consumer mistrust and the potential negative impact on business is growing compared with 2012 findings. 43% of internet users in both the US and Great Britain don’t trust companies with their personal information and 89% of internet users in the US and 91% in Great Britain said they avoid doing business with companies where they have privacy concerns.
Concerns Rise Where the Stakes are Highest
Online shopping and using social networks top the list of both US and British online privacy concerns: 89% of US and 88% of British internet users worry about their privacy when shopping online and 87% of US and 86% of British internet users worry about their privacy when using social networks. Some of this retail concern may be due to the fact consumers visit a wide range of sites for online shopping, frequently for single transactions, and have to take a new leap of faith each time.
However looking in detail reveals that the depth of concern rises where the stakes are highest. 35% of online banking customers in the US and 27% in Britain were always concerned when banking online and 30% of online shoppers in the US and 18% in Britain were always concerned when shopping online. So even though concerns about retail banking may be lower than those about online shopping, the people who are concerned about online banking are very concerned.
Sharp Rise in Mobile Privacy Concerns
Concerns are also rising as the market shifts. Mobile privacy concerns increased sharply over the last year and 72% of US smartphone users are more concerned about privacy on their smartphones than they were a year ago. Significantly for businesses, 81% of US smartphone users said they avoid using apps that they don’t believe protect their privacy. In the UK the levels of concern were slightly lower with 66% of smartphone users more concerned than a year ago. However the potential business impact was nearly the same with 79% avoiding apps where they had privacy concerns.
Whether you run an e-commerce website or a mobile app, you cannot succeed without a healthy data relationship with your users. And the more people trust companies, the more willing they are to share data. Reassuring users about mobile privacy is clearly a key priority to ensure continued online growth in 2013.
Raising the Bar
The proportion of internet users who don’t trust companies with their personal information is the same in the US as in Great Britain (43%) but British users feel slightly more confident (75%) than US users (71%) that they know how to manage their privacy online. 96% of British users wanted the ability to control who can collect their personal information and who can track their activities online – now a legal requirement in the EU under the Cookie Directive that has been enforced in the UK since May 2012.
The introduction of the EU Cookie Directive has helped to raise awareness as to how consumers can gain transparency and control over online tracking and as a result, many websites have taken steps to comply. Despite these measures privacy concerns remain high; the problem may be that increased consumer awareness is raising the bar for what companies need to do to stay ahead of the game.
For more details from the research and how to address these consumer concerns see full report.