Power to the people: how consumers are calling the shots when it comes to data privacy

By Shallu Behar-Sheehan, CMO, Trūata

The COVID-19 pandemic has revolutionized many aspects of everyday life. The way we socially interact, the way we work, the behaviour patterns of our everyday lives. For many, it’s also reshaped how we engage and communicate with brands and organizations. Prior to the pandemic, consumers had a choice in how they purchased goods – instore bricks-and-mortar or online; however, lockdown restrictions swiftly removed that choice and consumers had no option but to  fully embrace the digital world. As a result, internet traffic hit an all-time high, with online retail sales increasing 32.4% year-on-year in 2020, and 39% in Q1 of 2021.

Changed behaviours and accelerated digital transformation triggered by the pandemic have become  catalysts for conversations surrounding data privacy and, having developed a heightened awareness of their expanding digital footprints in a digitally led world, consumers are making their expectations known. Our Global Consumer State of Mind Report 2021, which captured the views of 8,000 consumers across the globe to understand the challenges and fears that consumers face around data privacy, found that people want to take back control of their digital selves – something they believe they’ve lost during the pandemic. The report found that over three-quarters (77%) of global consumers have taken steps to reduce their digital footprint for fear that they are losing control of their privacy. Furthermore, 76% believe that brands need to do more to protect their data privacy.

These stats issue a stark warning to organizations across industries who have become reliant on data analytics to refine commercial strategies, evolve products and services, and personalize consumer experiences. While the pandemic provided the perfect window of opportunity for organizations to gather vast amounts of valuable data, that future value of that data will now be dictated by the approach organizations take to preserving privacy. A compliance oversight, a data breach, privacy-aware consumers speaking out – all of this, and more, leaves organizations vulnerable unless they are placing privacy at the core of strategies, processes and policies.

To avoid losing out to privacy-conscious competitors, here are five consumer insights that should trigger organizations to pause and absorb so that they can pivot and propel forward with privacy-first data strategies.

1. Consumers aren’t just complaining – they’re taking action

The past year has created a tipping point for trust and digital privacy. Gone are the days when consumers would passively accept the ‘free’ benefits exchanged for their personal data. Indeed, invasive targeting, data misuse and an acute awareness of how the digital self has become such a hot commodity to data-driven organizations has led to a new wave of privacy activism.

Valuing their ‘right to be forgotten’, more than three quarters (77%) of UK consumers have taken steps to reduce their digital footprints; this rises  to 84% of Generation Z (20 to 27 year olds), highlighting how strongly society’s younger consumers feel about their privacy and the extent to which they prioritise it. In efforts to pro-actively take back control, consumers are no longer merely calling for regulations; they are looking at the impact of their digital footprints and putting measures in place for themselves. These measures include rejecting/disabling website tracking cookies (38%), unsubscribing from email lists (36%) and using private browser modes on devices to avoid being tracked by companies (30%).  A further 18% have deleted a social medial account and 1-in-5 (20%) have already made an active decision not to take out a loyalty card for fear of too much data being collected about them.

With consumers now seeking to backtrack and retrace their steps to reclaim ownership of their digital selves, these results send a warning to brands that they need to tread with caution if they intend to retain trust and long-term loyalty.

2. Privacy is now a key differentiator

Adapt, evolve, or die. Data-driven organizations who are not already embedding privacy at the core of company culture and values are already behind. Privacy is set become a key influencing factor in purchase intentions with consumers signalling its importance. In fact, 6-in-10 (62%) global consumers already say it’s now a key differentiator when choosing to engage with a brand or particular product.

But how will consumers be able to identify whether a brand is behaving responsibly with their data? Demanding more than regulatory compliance, digitally-savvy consumers are now calling for the introduction of privacy certifications, with 62% globally stating they would feel more reassured and more likely to buy from a brand if it was officially certified according to a data privacy standard, similar to a Kitemark in the UK or SEI quality mark in the US, for example.

3. Consumers are questioning data for ‘societal good’

There has been considerable debate around the introduction of COVID vaccination passports, not only within the UK Government but also from the general public who are looking beyond the freedoms it could present them and are more concerned over how the data exchange will impact them in the long run. . While a vaccination passport system has been mooted as a fast-track to the reopening of the country and international travel, it has raised a number of ethical and privacy concerns around personal data.

According to the results of our report, just 59% of UK consumers are happy to share their personal healthcare data in exchange for a vaccine passport, with the percentage dropping to 52% amongst 18-24 year-olds. This sentiment is echoed on a global level with only 44% of 18-24s happy to share such data. The past year has raised questions about the UK Government’s handling of private data in general, with more than 4-in-10 (43%) of UK consumers (45% globally) agreeing they trust the government less than brands they shop with to responsibly look after their personal data. The recent news that the NHS plans to share data about patients’ medical histories taken from their GP records for third-party research purposes, is only likely to exacerbate the issue. Indeed the planned launch for July 1 has been pushed back to September 1 due to concerns about patients’ privacy being breached.

The Government has had to be agile in reacting to the latest changes in national and international COVID reports, using big data to monitor and control the spread of the virus; however, our report shows that this agility cannot compromise personal data. Governments need to know there doesn’t have to be a conflict between privacy and the use of data for societal good, if effective privacy-by-design approaches are adopted.

4. Hyper-personalization is threatening privacy boundaries

Progressive technology, such as artificial intelligence (AI) and machine learning (ML), has revolutionised the customer experience. However, growing investments in AI to harness the prolific explosion of data is also creating a sense of discomfort amongst consumers and regulatory authorities alike.

Statistically, consumers have shown they are more likely to buy from a brand that offers a personalized experience. As a result, organizations are developing hyper-personalization strategies to meet their heightened expectations.. However, a paradox is now at play: consumers want personalization and privacy; they want innovation but not invasiveness. There now exists a point of no return when consumers feel that brands have crossed ‘the creepy line’ with their personal data.

Almost 6-in-10 global consumers (59%) feel worried that businesses have overstepped the mark when it comes to their data usage during lockdown. Setting the bar of tolerance, 60% of consumers in the UK agree that they would prefer not to have access to personalized offers if it means that brands cannot track them or their shopping behaviours, a statistic that has risen over the past year and sits at a global average of 55% in 2021.

These statistics highlight that in the pursuit of hyper-personalization, finding the fine line between algorithmic ‘coolness’ and algorithmic ‘creepiness’ will be what commands the respect and long-term loyalty of consumers.

5. Consumers are calling the shots

The pandemic and an increased reliance on technology has brought about a shift in power dynamics.  It is no longer only the enforcement of regulations that is holding organizations to account; it is now everyday consumers as well. When it comes to their personal data, consumers are speaking up and acting out; they are demanding transparency and accountability; they are less concerned with loyalty benefits and more aligned to brands that are able to demonstrate responsible and ethical data use.

Future-thinking organizations are also understanding that investments in privacy not only enable them to meet these customer expectations but provide them with a competitive advantage in a noisy digital world. In addition to this, knowing that a privacy-centric mindset bolsters brand value, heightens investor appeal and helps to avoid the costly collateral damage of non-compliance provides an insight into why we are seeing a continued rise in the adoption of privacy technologies to overcome big data challenges. Ultimately, it will be those organizations who understand the correlation and convergence of consumer values, commercial data strategies and emerging tech markets that are able to step-ahead in a privacy-conscious, digitally-driven world.