New Survey Reveals Consumer Conflict between Privacy and Personalization
In Post-Cambridge Analytica environment, consumers prefer consent-based marketing over third-party data tracking by a 2:1 margin
Survey also shows that, despite skepticism, consumers look to brands as a stronger source of influence than bloggers and peers
PORTLAND, Ore. – May 14, 2018 – According to a new survey of 1,023 adults representing the online shopping and purchase habits of the U.S population, Americans’ concerns around data privacy are at odds with the prevailing approach the majority of marketers use to deliver personalized offers and promotions. The consumer shopping report “Privacy, Personalization, and Promotions”, published today by Kelton Research and SheerID, uncovers that in the shadow of the Facebook-Cambridge Analytica data scandal, consumers want brands to require consent before using personal data for targeted marketing by a 2:1 margin. In addition, 94% of Americans reported they would take advantage of an exclusive offer ahead of other popular retail programs like price-match guarantee or VIP service.
Privacy concerns spur need for consent-driven marketing
Survey results underscore the conflict marketers face when using consumer information to personalize offers without explicit buyer consent. Opinion captured in the survey questions the viability of personalization techniques that rely on third-party data tracking, showing a 2:1 preference for opt-in – or consent-based – models over traditional inference-based approaches.
- Only 8% of consumers want brands to use social media likes and clickstream behavior when identifying them to receive a promotion or exclusive offer. 13% want brands to use social information they willingly provide (e.g. birth date), and 17% want brands to use clickstream behavior from the brand’s website. In comparison, 40% prefer that information be collected at the time of a form submission on the brand’s website.
- While millennials are less sensitive to brands collecting personal data from social and clickstream behavior (14% are comfortable using social clickstream and like behavior versus 8% for the general population), 30% still prefer an opt-in form – the most popular type of data collection.
- Also demonstrated by the survey is a high level of consumer mistrust: 73% of shoppers believe that when they’re redeeming an offer, brands use personal information without their consent.
Exclusive offers rise to the top in purchase influence
Despite data privacy concerns, consumers are enthusiastic about exclusive offers. Americans are just as likely to say an exclusive offer (84%) would make them likely to shop with a brand as a price-match guarantee (86%) or VIP access (80%). More specifically, 47% of millennials said exclusive offers would make them highly likely to make a purchase.
The survey data also indicate that exclusive offers are rising to the top as a preferred way to influence shopping habits and purchase behavior, including:
- Likelihood to purchase – Nearly 3 in 5 (58%) of those who would use an exclusive offer say it would increase their likelihood to purchase, while 41% say they would likely seek out something to buy so they could use the offer.
- Cart value – 40% say they’d spend more overall and/or (28%) purchase a more expensive product with an exclusive offer.
- Urgency – 48% say an exclusive offer would make them purchase sooner.
- Frequency – Over 4 in 5 (82%) say an exclusive offer would increase how often they shopped with the brand.
This increased willingness to shop may be due in part to the emotional lift an exclusive offer can provide: nearly half (47%) of Americans say qualifying for an exclusive offer would make them feel excited, while many would feel special (36%) or honored (34%) — hallmarks of generating customer loyalty.
Brands are in a strong position of influence
Brands are viewed more favorably than expected as a source of influence, significantly higher than peer recommendations and higher than bloggers by a 3:1 margin. 61% of Americans say they prefer to learn about new products and brands directly from the brand itself. This is second only to friends and family members (73%).
Yet consumers also insist retailers wield this power responsibly:
- Over 46 million (19%) say knowing that a brand didn’t maintain the exclusivity of an offer would negatively impact how they interact with a brand.
- Not only would most (80%) lose trust, but 53% would shop with a brand less often, and 33% would recommend their friends and family shop elsewhere.
“Based on the findings, brands have so much to be excited about, but only if they can earn and hold their customers’ trust,” said Jake Weatherly, CEO of SheerID. “This is a wake-up call: as Americans insist on more transparency into how their data is used, it’s incumbent upon brands to get the privacy piece right and establish more integrity in customer relationships, particularly when delivering highly personalized offers.”
Further reflecting Americans’ desire for data privacy, 92% said knowing their personal information wouldn’t be shared if they redeemed an exclusive offer is important to them. And to increase their trust in brands and exclusive offers, 57% of consumers would like companies to use a third-party verification system – an approach that can instantly verify customers with minimal data use.
About the Survey
Survey responses were collected from more than 1,000 nationally representative Americans 18 years and older, between April 23-26, 2018. For more information, you can view the full report on the country’s shopping habits. You can also sign up for the webinar and hear how industry leaders are implementing these practices, hosted by Kelton Research and SheerID on May 22, 2018, 10:00 a.m. PDT.
SheerID’s leading digital verification platform instantly verifies the identity of individuals and businesses, enabling enterprises to deliver exclusive offers and experiences to high-value customer segments while mitigating fraud and minimizing friction. By using authoritative data sources to verify credentials in real-time within an organization’s brand experience, SheerID delivers a seamless customer experience that reduces churn and fuels loyalty to drive revenue growth. As a result, the world’s biggest brands – including Spotify, Foot Locker and Microsoft – rely on SheerID as their trusted verification partner. Founded in 2011, SheerID is backed by Voyager Capital and Centana Growth Partners.