Consumer Fears Could Stunt Sales
While e-commerce retailers are hoping for a merry — and green — cyber-holiday, a recent survey found that two-thirds of online shoppers feel insecure about providing personal information online.
The fears expressed by online consumers could translate into stunted sales and could affect how people spend their online time in general, according to the survey conducted by Forrester Research Inc., a high-tech marketing research company.
“Nearly 90 percent of online consumers want the right to control how their personal information is used after it is collected,” said Christopher M. Kelley, a Forrester analyst who supervised the survey.
Buyers of both sexes and of all ages and incomes are concerned about online anonymity. Surprisingly, these concerns change very little as consumers become more used to the Internet, with 53 percent of those who have been online for four years or more still concerned about privacy.
The survey also found that 24 percent of virtual consumers are only somewhat concerned about online privacy, while 9 percent are not concerned that much.
The 67 percent with serious concerns about their online privacy “shop online less and sign up for few e-mails from retailers,” the survey found.
Fear of spam and telemarketers
Online shoppers said they are also generally concerned about how much personal information they give and who sees it. They worry that the information will produce unsolicited spam or telemarketing calls.
As a result, 80 percent of Internet users support a policy that prohibits the sale of data to third parties, and 50 percent are willing to contact the government to regulate online privacy.
On the other hand, consumers don’t mind giving out personal information when they receive specific benefits, including the chance to win free goods through sweepstakes and promotions. In addition, 30 percent of online shoppers will give out some data to their favorite retailers even when they are not buying. Though less important, access to members-only sections of a site gets one-fifth of Web users to share private information.
The Forrester survey is not alone in finding consumer qualms about online privacy.
Another survey finds distrust
“The intense media coverage of the online privacy issue is fueling consumers’ fears,” said Michele Slack, an analyst for Jupiter’s online advertising strategies. “Web ventures are allowing the media to create an online privacy dialogue with consumers, thereby missing out on an opportunity to shape this important dialogue with consumers themselves.”
She said that while the online industry, worried about federal regulation, has aggressively pursued privacy issues with government agencies, it has not been very effective at promoting its efforts with consumers in order to build trust among online users, said Slack.
And a survey conducted last year by the Federal Trade Commission (FTC) of more than 1,400 Web sites found that only 14 percent of the sample, which reflected all U.S. commercial Web sites, provided any notice of their information collection practices.
FTC favors self-regulation
In testimony before a congressional committee this summer, FTC officials argued that self-regulation is the best way to deal with online privacy.
FTC Chairman Robert Pitofsky said the commission plans to monitor both the development of privacy-protection programs and efforts to enforce privacy even as online efforts are already under way.
“There is more to protecting consumer privacy than simply publishing notices on Web sites,” Pitofsky said.
A seal of approval for Web sites
TRUSTe is another online privacy seal program allowing Web publishers to inform online users of their sites’ data gathering and dissemination practices.
“It’s very hard to determine if your information is being used, so it is critical that companies are doing the things behind the scenes to assure they have the processes to live by those privacy notices,” said Bodoff.
Forrester analyst Kelley said online merchants need to have understandable privacy policies.
“A coherent privacy model gives retailers the ability to monitor how their consumers feel about them. The first step is to advertise privacy policies boldly and in plain English,” said Kelley.
The Forrester survey was conducted by contacting roughly 100,000 American and Canadian members of the NPD Group’s consumer mail panel. For “The Privacy Best Practice,” researchers re-surveyed 10,000 online households. NPD Online Research, a division of The NPD Group, develops World Wide Web-based technologies to conduct and deliver market research and analysis.