High Risks of Retailers Ignoring Customer Privacy & Website Usability

Distrust of how online stores handle their customers’ personal information has reached an all-time high, which leads to sellers losing revenue and subsequent orders.

Over a quarter (26%) of consumers have abandoned a brand in the past 12 months due to privacy concerns. Establishing a higher trust level is becoming an increasingly important basis for digital retailers’ success if not survival.

Technology and security provider firm Thales released its 2024 Digital Trust Index Ranking in February. The report revealed that only 8% of consumers feel comfortable sharing their personal details with online vendors. Based on responses from 12,426 consumers globally about their relationship with online brands and services, the findings challenge the growing popularity of online shopping.

The survey results cover more than just food and soft goods purchased online. Media and entertainment, social media and logistics companies are at the very bottom of the industry rankings.

Thales found that most retail customers now demand a good balance of security and positive digital experience from all online business encounters. Research also revealed that newer forms of online engagement pose barriers to securing customers’ trust.

When sharing their information, consumers place more trust in banking, health care, and government services. According to Thales Vice President of Identity and Access Management, Danny de Vreeze, this is a universal trend across all the markets surveyed.

This year’s report ranked retail and hospitality as the fourth least trusted sectors. This aligned with the 2022 report findings, in which the retail industry was still among the least trusted industries.

Given that such a high percentage of consumers do not trust data security, this problem seems to be ignored. Despite the clear awareness of the need to ensure data confidentiality, he noted that awareness of this does not always lead to real results.

The report findings reinforce that the right to privacy and security is non-negotiable. The majority of customers (89%) are willing to share their data with organizations.

However, that comes with some non-negotiable caveats. For instance, over a quarter of consumers (29%) have abandoned a brand in the past 12 months because it demanded too much personal information.

As more companies expand their digital presence, lessons can be learned for unregulated industries as consumer preferences change.

More than four in five (87%) expect some level of privacy rights from the companies with whom they interact online. The biggest expectation is the right to be informed that their data is being collected (55%), closely followed by the right to have their personal details erased (53%).

The Thales report also highlights the role that a well-developed website plays in building customer loyalty, regardless of the privacy factors they face. Customers’ problems run much deeper than how online services use their data.

In addition to privacy demands, organizations must also deliver a seamless online experience to earn the trust of their customers. Today’s consumers are increasingly time-conscious, with over a fifth (22%) stating they would instantly give up on an online interaction when facing a frustrating experience.

Respondents also named advertising pop-ups as their number one frustration (71%), closely followed by password resets (64%) and having to re-enter personal information (64%), complex cookie options (59%).

The report highlights that email (40%) and phone calls (28%) are not just the preferred channel of communication for consumers in retail but also in other industries,. The important trend to note is that there are now significantly more channels and touchpoints for retail services to handle.

Experts maintain that trust is not a monolithic concept, especially in the digital world. Organizations must devise their own formula for measuring trust.