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Consumer data security and trust towards retailers

Full report: Understanding the retail customer journey for the fashion industry

Consumer data security and trust towards retailers

Do consumers trust retailers concerning their personal data, its security and use?

Although fashion brands are investing heavily in digital technology to achieve personalised experiences for individual customers, research indicates that consumers – particularly older shoppers – have concerns over data security and are wary about the use of their personal data

This article forms part of a wider piece of research and focuses on Stage 1 of the customer journey (Awareness and Research) and covers a selection of issues concerning trust at this initial stage. 

What’s the benefit of giving more personal data?

Our research discovered that 55% of respondents indicated that, as online product recommendations are typically inappropriate, they do not see the benefit in providing more personal data.

Our research discovered that 55% of respondents indicated that, as online product recommendations are typically inappropriate, they do not see the benefit in providing more personal data.

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This work forms part of a wider piece of research and is a downloadable in pdf format

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Value versus intrusion

Retailers that are making headway in the ‘personalised experiences’ stakes tend to be those that understand the sensitivities of overstepping the mark in the ‘value versus intrusion’ equation. 

Customers increasingly recognise the value of their data and want something of value in exchange – not just more targeted recommendations or personalised discounts.
 

Improvements are needed

There is evidence to suggest that some customers would be willing to pay more for goods and services to a retailer who simply kept their personal data and chose not to use it for serving targeted promotions to them. 

This suggests that personalised experiences are not yet sufficiently fine-tuned for an equitable exchange of value in the eyes of the consumer.

Yet, according to Episerver, nearly 60% of customers want a personalised online experience, and 65% are more likely to purchase in-store or online from a retailer which sends them relevant, personalised promotions (Accenture).

Retailers still have challenges ahead and will have to be prepared for a certain amount of trial and error as they test, learn and communicate their proposition with customers.
 

Protection of customer information

Responsible handling of customer information has become a priority for retailers and brands, but it appears retailers need to make strong headway to build trust amongst consumers. 

“An overwhelming 67% of respondents do not trust retailers to act responsibly and to protect their data”

With that in mind, it is perhaps unsurprising that when respondents considered who they trust the most to handle their personal data, just 4% of customers trust retailers.

 

Consumer trust in retailers compared to other institutions

 

“Just 4% of consumers trust retailers the most in handling their personal data compared to other institutions”

Best practices in data trading and ethical use are concepts to which incumbent retailers and brands must pay close attention, as data breaches are the unfortunate flip-side of many marketing campaigns.

Retailers and brand owners must demonstrate transparency over how customer data is collected and used. They also need to give customers full control over their data and reassure them that it will be beneficial to them when integrated within digital marketing strategies. 

Lastly, responsible data handling will be a prerequisite for a sustained presence within an information-saturated marketplace.
 

Consumer needs for ‘touch and feel’

Despite the way consumers feel about retailers and brands and the way they use their data, the in-store experience is of vital importance within the customer journey. Consumers still want a tangible experience when considering many types of purchases, especially within the apparel sector. Although technology is helping with issues such as fitting and trying on clothes virtually, this can’t replicate the experience of brushing fabric against ones cheek to feel the softness of a scarf for instance (at least not yet). Learn a little more about this issue...

Things to do now

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Found this short article interesting?

This research was conducted by Retail Economics in partnership with Pennigtons Manches Cooper and forms part of a wider piece of research that focusses on the initial stage of the retail customer journey for the fashion industry (stage 1 of 4). It unpacks the key themes that influence consumers and retailers here and identifies future trends in this space. Retail Economics supplied the data sets, collected from a consumer survey of over 2,000 nationally representative individuals in Q1 of 2019. 

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