HGA Group Dinner: Convenience vs Privacy in the Data Driven World
The global retail market is changing rapidly, with the digital revolution having changed the way our current generation carries out everyday tasks. In the digital marketplace, consumers have for a long-time exchanged data for services they find valuable - online shopping, chatting with friends, free Wifi, finding directions and so much more. But we are increasingly starting to let platforms into our lives like never before. There are very few corners of the online world where users can actually guard their data, with almost anything you do online leaving a track. Data has now surpassed oil as the world’s most valuable resource, with the data economy not going away anytime soon. This brings to light the key topic of debate in our data-fueled world, ‘Convenience vs Privacy’. This privacy paradox brought us together recently for a dinner event featuring an evening of discussion, with Mei Chen (Head of Fashion and Luxury UK, Iberia and Northern Europe, Globalisation Business) from Alibaba Group sharing key insights into the critical topic at hand.
Experian’s ‘Global Identity and Fraud’ Report shows that people are more than happy to share their personal data freely, even with growing privacy concerns, as long as they’re getting a tangible, personalised, rewarding offering in return as a trade-off. Today’s internet giants, such as Google, Facebook and Alibaba, are running on data, collecting personal and sensitive information from us to build a picture of our habits and ultimately target us more successfully. The ‘battle of the platforms’ is rife, and the consumer’s information is at the dead center of it. The high value of this collected personal data to these companies is vastly underestimated by consumers, but the high value of the services to which they in-turn provide customers, seems to far outweigh any concerns consumers might have. These online companies promise to manage the risk and deliver us a seamless experience, but increasingly, we are seeing data breaches compromising the personal information of millions across the world. But despite data-related breaches or scandals such as Cambridge Analytica, Equifax, Aadhar, Starwood/Marriott and others, a new report from Strategy Analytics suggests that consumers seem willing to put up with privacy violations and data breaches for the sake of convenience. A conclusion, supported by other recent surveys and research such as a global study last year by the Global Alliance of Data-Driven Marketing Associations (GDMA) and the UK DMA, found that 77 percent of people in 10 nations (including the US, the UK, Spain, France, Germany, and the Netherlands) are either “pragmatic or unconcerned about sharing their data.” Though, these studies also show in contrast, that consumers are still “very concerned” about their online privacy and the vulnerability of their data, with 82% of Americans reporting a level of concern between seven and 10 (out of 10). Most people are unawares and underestimate how much of their personal information – including biometric information – is available to corporate entities through their online footprint, as well as the extent to which they are permitting companies to use their data. As we go about our daily routine, we inadvertently share far more data than we realise. Still so, even with the known risks and apprehensions, customers do not mind sharing this information to gain access to the convenient services companies are offering. It is certainly perplexing that this major concern over privacy coexists with such a willingness (that continues to grow) from consumers to continue sharing their personal data so freely online.
Many argue the generational factor - but the willingness to share data is far more complex than this. Age, gender, culture, geographic, history, socio and economic factors all play a role in who wishes to share their data. Every day, the complexities of trading as a global world increase. But above all, it seems that consumer ‘convenience’ and ‘experience’ are the fundamental drivers in online users being increasingly okay with letting companies capture so much of their personal information. Research shows that consumers seemed to also have accepted the fact that often, their data will not be protected, especially when using services like Facebook or Amazon Alexa. The User Experience Strategies group at Strategy Analytics have found that data breaches, misuse of data, and the increased use of personal biometric information for security purposes, is largely seen as part of the cost of being a part of the connected world – a cost that consumers are largely resigned to having to make. “Even with companies with questionable practices, extensive media coverage of privacy issues and widespread data breaches, consumers are not likely to abandon apps that they see as having value to them.” So even when it is remarkably clear that that the global economy’s addiction to data carries serious risks, data sharing continues to grow. It appears that even though consumers are exceedingly aware of data breaches impacting their personal data, they ignore the facts and evidence until it actually becomes ‘personal’, where they truly experience the impact of their openness to sharing their information - why waste time with privacy policies or settings, when it doesn’t seem to bear any effect on them in the now?
Increasingly so though, a new consumer consumption driver is coming into play – ‘trust and transparency’. By building consumer trust, companies can build meaningful and successful online relationships. This is highly evident in the Eastern culture, which seems to be at least 10 years ahead of the Western world in terms of online modernity and legislation (as opposed to the UK leading the world digitally 10 years ago). In China, shoppers were asked what would cause the most pain – losing their wallet or phone. 90% answered their phone, 10% answered their wallet. In Europe, a complete reverse result was reached with 90% of shoppers stated that losing their wallets would cause far more of an inconvenience. It seems that in China, there is a much higher level of legislation enforced, and ultimately trust from consumers. EPIC’s Marc Rotenberg debates that “the real privacy paradox is that transparency is required for effective privacy protection.” In the EU, GDPR is now creating a much higher standard for consent, enforcing a legal framework of rules in which online businesses have to acquire clear-cut consent from users in order to gather their personal data, clearly stating what kind of data is being collected and what it will be used for. They also have to offer users the option to opt out, as well as the chance to delete their personal data. This structure is designed to give online users more control over their personal data, whilst still being able to benefit from the digital economy. It allows users to decide what information they wish to share (and ultimately be protected), with whom they want to share this information with, and what information they also wish to withhold.
As the digital world grows, the future depends heavily on a company’s ability to prioritise consumer convenience, experience and trust, and the balance between privacy and user experience. Successful businesses will be those able to incorporate digital identity solutions effectively, giving users the opportunity to protect their data, without forfeiting user experience or convenience. The leveraging of customer data to better serve them, without misusing their information, is ultimately the answer to the issues of our modern digital world.
Thank you to Paul Martin – UK Head of Retail, KPMG for facilitating our event and driving a very interesting discussion. .