Consumers concerned as retailers look to cash in on store data

Retailers face a fine balancing act between tapping the potential of new technology such as store monitoring, and being seen as overly intrusive and untrustworthy. While some customers are willing to forego some privacy for a more personalised shopping experience, companies need to be aware that heavy tracking is likely to result in negative consumer and regulatory outcomes.

Consumers are concerned about a lack of cybersecurity as the number of breaches balloon. Businesses that fail to protect their customers’ information are also falling prey to hackers, which can steal business secrets and disrupt operations. Costs are mounting, while governments move to sharpen regulatory oversight.

To understand how consumers are accepting and trusting of businesses, models and cyber threats, KPMG recently released its ‘Consumer Loss’ report. According to the study, the rush to utilise the goldmine that is consumer data may come with various risks. Consumers may become turned off by companies that invade their privacy; regulators are increasingly looking to curb various practices that are abusive; and hackers continue to find weaknesses in digital technologies.

The data published in the study was taken from a global report, based on a survey of 1,802 security executives in 24 markets across 12 industries. KPMG’s Global CEO Outlook found that half of chief executive officers believe that it is purely a matter of time before their organisation experiences a cyber-security incident. Despite this, the survey also identified a significant oversight on the part of executives, only 8% of whom would seek to demonstrate they had solved such issues, while more than a third of consumers would want that – opening the door for a significant decline in the trust of companies by their customers.

KPMG’s new analysis found that businesses are potentially sleep-walking into a crisis, then. Many are seeking to advance their agenda through various digital technologies; however, many of these technologies will require consumers to consent, engage and trust companies that leverage them. That trust is by no means given. Various high-profile trust breaking events have taken place recently, centred on the misuse and abuse of consumer data and implicit trust. Numerous large-scale hacks too have resulted in consumer information finding itself on the street.

Retail concerns

While various technologies sound promising, the innovations are increasingly seen as invasive by consumers. While companies are keen to have the technology because it gives them a perceived advantage, they risk alienating consumers to the point of not entering their stores or buying elsewhere. Few respondents are keen on being tracked, either online or in-store. Location tracking was seen by 48% as uncomfortable, while 23% of respondents were comfortable with it. Many however, remain uneducated about the risks associated with the technology, which means that discomfort is likely to rise.

Loyalty programmes are seen as the least threatening. The data involved tends to be less personal, with more control over whether such tracking is taking place. Session replay and journey tracking are seen by the largest segment as uncomfortable.

The number of respondents that are keen on personalisation remains relatively low, and is heavily contingent on a perceived benefit to the consumer. As it stands, the vast majority of respondents are not keen on personalisation without conditions, with 11% saying they don’t mind their personal information being stored as it provides opportunities unique to their preferences. Meanwhile, just a third stated they were not concerned about the technology, if they have the option to control what information is stored and shared. 

The idea that consumers are just worried about being hacked by external parties misses the mark in many instances – consumers also do not trust many companies that collect their information for personalisation. This is particularly true when third party companies are involved: 36% of respondents said that they don’t want their personal shopping habits and information to be collected or acquired from third parties, reflecting a further issue for companies that leverage third parties to acquire personally identifiable information about their customers.