New study on consumers’ trust in retail’s data collection
In this blog post Stefan Larsson, PI for a WASP-HS project, report on a new study on Swedish consumers’ trust for retail’s data collection. The Swedish report is co-authored by Stefan Larsson with Theodor Emanuelsson and Sara Thiringer at Lund University, and launched on 8 December.
The purpose of the study is to better understand the extent to which the public thinks that the exchange between what they receive in terms of, for example, discounts and offers and what they give in terms of their own data is a fair and balanced exchange. Access to data – as many would argue – is a prerequisite for developed services, individual relevance and strengthened competitiveness.
The project, which is funded by the Swedish Retail and Wholesale Council, seeks to contribute with knowledge on how retail can strengthen the customer’s trust in data-driven and individualized services. However, the results show quite significant challenges in retail’s trust levels for data collection and data management. The data collection was carried out in collaboration with Novus in 2020, and the analysis has been done on a representative sample of the Swedish public of just over 2,000 Swedes.
An unbalanced trade-off?
For example, despite an often-heard argument that data collection and customer profiling are motivated by creating relevant advertising offers, the study finds that a majority (58%) of consumers do not consider it is reasonable. In line with this, the study found that more than half (57%) do not think it is reasonable for companies to collect personal information in return for discounted goods and services. The consumers’ support for identification via smartphones or filming in a physical store is particularly weak, where only 1 in 10 think it is reasonable in exchange for benefits or improvements to their shopping experiences.
Trust needs to be strengthened
The results from this study indicate that Swedish retailers have significant work ahead of them in terms of increasing customers’ trust in their data collection and data management. An increased sense of control over their information for consumers could lead to greater faith in retail’s handling of customers’ data.
The authors of the report recommend that:
- Retailers adopt a higher level of ambition in contributing to customers’ knowledge and actual understanding of how their data is used. This is because prevailing practices regarding how customers are informed about e.g. cookies and other user agreements do not seem to contribute to creating particularly aware consumers.
- Retailers should clarify the benefits they see for their customers in sharing their information, as there does not seem to be any broad support for consumers wanting to share their personal information in exchange for better tailored advertising, or discounts and offers, whether online or offline.
In the balance, the authors argue, may several benefits lie that a well-established technological development in retail can bring. A more transparent use of individuals’ data, where the consumer feels in control, can strengthen consumers’ trust in retail actors and stimulate service and product development that is perceived as fair and clear.
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Authors: Stefan Larsson, Theodor Emanuelsson, och Sara Thiringer, Lund University