May 2018 marked the introduction of GDPR, a landmark piece of legislation that completely changed businesses’ approach to customer data. Whilst GDPR promised to do so much, but rather than resolve consumers’ concern around their data privacy this is an issue that is equally if not more pertinent today than four years ago.
Latest research from Motive.co has highlighted this, revealing 83% of consumers are still concerned that their data is being tracked, collected and sold to advertisers. It’s apparent that current data practices across the sector, whilst GDPR compliant are not doing enough to allay consumer fears and concerns. To address this issue, brands and retailers alike must go beyond the GDPR to build a non-intrusive approach that will help them win back consumers’ trust.
GDPR, then and now
GDPR has undoubtedly had a significant and positive impact on data protection. It established much needed data protections, put greater responsibility on data controllers, gave consumers greater rights and control and has been used as a foundation for similar protections introduced across the world. However, the contrasting response from businesses and consumers to this landmark piece of legislation has led us to where we are now.
Far too many businesses saw the introduction of GDPR as a tick box activity. Consequently once business leaders ensured regulations were adhered to the subject was not thought of again. Whereas for consumers, its introduction ignited a wider awareness of their data and data privacy more generally. Rather than this putting an end to the issue, it was only the beginning for increasingly data conscious consumers.
As retailers and brands continue to be GDPR compliant on paper, but still use intrusive tracking practices that view customer data from a purely transactional perspective, consumers’ distrust and concern grows.
The consumer viewpoint
A huge 95% of consumers feel it’s important that their data is protected online. However it’s clear tha consumers don’t feel that brands and retailers are doing that or are using their data in a responsible way. In fact, 81% of consumers are currently concerned about how businesses use their data, highlighting the chasm between current consumer expectation when it comes to data protection and the practices of the industry.
There are also interesting insights to be seen when examining consumer views across gender and generational lines. Overall, consumers across ages and gender are in agreement on key issues when it comes to the use of their data. However, there is a significant gap in understanding of data policy enacted by brands and retailers, between men and women. Women are less trusting of brands when online, and have a higher tendency to be worried about the use of their data and it being sold onto advertisers and other third parties, at 85% in comparison to 81% of men.
Younger generations are also unsurprisingly more tech savvy and have a greater understanding of how their data is used by brands and retailers compared to their older counterparts. Consequently, they are more discerning when online and are more likely to leave websites where they feel uncomfortable with data practices. 72% of 16-29 year olds have left a site or app due to their concerns compared to 66% of 60 year old and over. It is imperative that brands and retailers improve their data practices irrespective of their target market or consumer. However, such dividing lines highlight how some brands and retailers will need to quickly make significant strides when it comes to rebuilding trust amongst their customer base or risk alienating and losing valuable consumers.
Why retailers’ trade-off mentality has to end
That such an overwhelming majority of consumers viewing their data privacy as important, should be enough for brands and retailers to take note. Yet, if that’s not the case, it’s also becoming increasingly clear that consumers will vote with their feet if such concerns are not addressed. Over two-thirds of consumers said they had left a site or app due to concerns about their data privacy or it not being user unfriendly due to their use of consent banners.
The prevailing argument across the industry that consumers were willing to accept the trade off of exchanging their private data for access to services for an improved experience is crumbling. This notion has underpinned an approach that has taken customer privacy for granted, exacerbated the issue of consumer distrust and created a poorer end user experience. No longer will consumers accept such a transactional relationship with brands.
The widespread use of consent banners are emblematic of the industry’s current failings when it comes to building trust with consumers around the handling of their private data. Almost three quarters of consumers find privacy and consent policies hard to understand and 88% of consumers labelled them as a frustrating part of their online experience. Retailers and brands wouldn’t accept this at any other point of the customer journey, yet in the pursuit of data standards have been lowered. What’s more, as alternative technology and online experiences that are no longer reliant on the use of personal data continue to emerge, consumers are no longer buying into the notion that there is a benefit to giving away their data and their privacy.
Jonathan Newman, CEO Motive.co