By Jonathan Newman, CEO Motive.co
The end of May marked the fourth anniversary of the introduction of GDPR in Europe, and yet the issue of data privacy remains as prevalent as ever. Far from putting the topic to bed, consumer and media attention has only grown since the arrival of GDPR, with concern and suspicion as to how businesses and big tech really use customer data increasing in equal measure.
In the UK, the latest research from Motive.co reveals that 83% of consumers are still concerned that their data is being tracked, collected, and sold to advertisers and two-thirds have left a site due to concerns about how their data might be used. The figures should make alarming reading for brands and retailers alike. Such levels of distrust are simply not tenable and the industry now must move beyond GDPR to alleviate concerns and regain consumer trust.
GDPR and its impact
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 inherently use intrusive tracking practices that view customer data from a purely transactional perspective, consumers’ distrust and concern grows.
The consumer view on data privacy
A huge 95% of consumers feel it’s important that their data is protected online. However it’s clear that 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 a change in approach is required
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 exchange their private data for access to services or 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.
It’s now more vital than ever that brands and retailers change their outlook when it comes to customer data and how they communicate that with consumers. The current transactional approach is alienating consumers who are increasingly conscious of their data privacy. GDPR can’t be seen as a solution to this issue but as a starting point to an ethical approach to customer data as a means to rectify the issue of consumer distrust.
Brands now must go beyond GDPR and look to a privacy-first future or risk being left behind.