Customer data breach concerns to pose risk to ecommerce future
Customer data breach concerns are set to pose a risk to ecommerce future, hindering sellers’ attempts to personalise the customer experience.
Sellers are eagerly adopting new technologies to leverage new opportunities. However, new risks are emerging. Consumers are increasingly conscious of the need to protect personal data and their privacy to reduce the risk of fraud, identity theft and misuse of their data. They also expect companies to be transparent about the data they hold on them, what they use it for and how it is protected.
Data breaches are not uncommon. High profile cases have drawn attention to the ethical use and protection of data with many companies on the receiving end of negative headlines and a consumer backlash.
Gaining and maintaining consumer trust is critical for merchants who house millions of digital profiles. Trust is an intangible asset, but if lost, result in very concrete impacts.
Increased scrutiny of online channels
In recent times, social media companies have been under intense scrutiny as users question the use of their data.
According to The Digital Tipping Point report by RetailEconomics shoppers have reacted, editing privacy setting on their accounts and/or mobile phones. More than a quarter of respondents have taken some action to limit the amount of data shared with companies, reaching almost a third for 16-24-year-olds.
Consumers also felt that the perceived benefit from the exchange of their personal data was not equitable. Two-thirds of consumers think that businesses benefited more than consumers. Just 8% of respondents thought that consumers benefited the most with 26% saying that there was an equal exchange of value.
Data breach concerns to challenge personalised experiences
It’s likely that GDPR regulations prompted a reconsideration of consumer attitudes towards data sharing with businesses. The concept of value exchange which sees consumers sharing personal data to receive personalised services, recommendations and offers are being challenged.
This is a worrying development for businesses that have sought to differentiate their proposition based on the acuteness of personalisation they can offer.
Perhaps unsurprisingly, financial rewards, free and discounted products rank most highly for consumer preferences in terms of data exchange.
Personalised services were ranked unfavourably with more consumers agreeing that is was unlikely that they would exchange personal data for this.
The biggest risk the report foresees regarding future online growth is consumer attitudes towards sharing personal data and the perception of sellers’ responsible use and protection of that data.