New research by GfK into customer trends and the views of people who buy online shows a high level of concern about retailers ability to track them, and particularly the potential to charge different prices depending on their browsing habits.
By Helen Roberts, Retail Research Director at GfK
Consumers have deep-rooted concerns over two distinct issues. The first is privacy and whether companies should be allowed to know what an individual is doing online – the potential to abuse this knowledge cannot be ignored.
The second is that those who don’t regularly browse online may well pay a higher price, even if they choose to purchase online.
Half the population currently browse for or purchase products on-line, with younger more affluent people more likely to do so. Most people (94%) are aware of some of the ways that retailers target online marketing activity, but only around half of online shoppers are currently aware that retailers use cookies to target specific offers and prices to them.
Of those aware of cookies, 37% tend to accept cookies when websites ask, whilst 55% say ‘no’. Not all sites actively ask for consent, relying instead on a low visibility implied consent option. Agreement tends to be higher among young people.
At the moment there are mixed views among shoppers about the acceptability of retailers tracking their behaviour. Just over half of online shoppers aware of cookie tracking, agree that retailers should be able to track their behaviour for a variety of reasons. Whilst this is encouraging for retailers, the 25% plus who don’t agree cannot be ignored.
This must serve as a warning to retailers that tracking shoppers must be done with caution and with integrity. Those who do not like it have potential to vote with their wallet and shop elsewhere if they feel particular retailers are overstepping the mark.
It should also be remembered that a third of online shoppers are not yet aware of cookie tracking and they may well have the same concerns at the same or higher levels.
Once prompted to the idea that retailers can potentially offer different prices to individual people based on how they shop, we see a very mixed response in terms of appeal.
One in five people believe targeted price reductions to individuals is something that should be banned, and a further one in five believe it to be unfair. This clearly suggests risk to the reputation of retailers that adopt differential pricing in this way.
For those who trade on price and convenience it may not be an issue, but brands that aim to offer great shopping experiences and build trusting relationships with their customers should surely tread carefully.
Perhaps the most interesting statistic in all this is that two-thirds of those who already know about cookie tracking believe it should be controlled to protect the consumer, and three quarters have security/privacy concerns around the activity.
This is surely a clear signal that some form of regulation is required, whether legislative or self-regulating to ensure the consumer is protected. Current data protection laws and recent EU legislation go some way to regulating the use of cookies, but retailers themselves will need to reassure their customers that they are acting in a way that is fair and safe for the shopper.
Without such reassurance there is a risk that online shoppers will share less information with retailers by stopping cookies and other tracking devices, taking online marketing back to the untargeted email promotions and banner advertising of years gone by.
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