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The E-Tailer’s Risk Increases When Website Usability and Privacy are Neglected

The level of mistrust among online retailers in the way they handle personal information from their customers is at an all time high. This has cost merchants revenue and subsequent orders.

In the last 12 months, over a quarter of consumers (26%) have abandoned a particular brand due to privacy concerns. The need to establish a greater level of trust no longer is an either/or option; it has become an increasingly important base for digital retailers success if they are not going to survive.

Firm that provides technology and security Thales The Digital Trust Index Ranking 2024 was published in February. In the report, it was revealed that only 8 percent of consumers felt comfortable giving their personal information to online vendors. The findings, based on responses from 12 426 consumers worldwide about their relationship with brands and services online, challenge the growth of online shopping.

The survey covers more than just soft and food goods. The industry rankings are dominated by media and entertainment, logistics, and social media companies.

Thales has found that the majority of retail customers are now looking for a good mix between security and a great digital experience when they engage in online business. Research has also shown that customers are less likely to trust newer forms of engagement online.

Consumers are more likely to trust government, banking and health care services when they share their personal information. Danny de Vreeze is Thales’ Vice President for Identity and Access Management. He says that this trend is universal across all markets.

This is not surprising when you consider how heavily regulated these industries, the information they are required to handle, and the security measures they have in place for consumer data,” he said.

No solutions to problems

Retail and hospitality were ranked fourth in this year’s report as the least trusted industries. Haider Iqbal’s, director of Thales IAM Business product marketing, said this was in line with 2022 findings where the retail industry remained among the least-trusted industries.

Iqbal said to E-Commerce Times that, “It’s interesting, even though retail didn’t rank among the top five most trusted industries in either 2022 nor 2024 but consumers showed a significant increase in trust in 2022 (20%) as compared with this year’s results (8 %),” Iqbal.

A high percentage of consumers do not trust data security. This problem appears to have fallen on deaf ear. He noted that while there is a general understanding of the importance of data privacy, this does not always translate into actionable results.

“Regional dynamics seem to be the main driver of taking action.” “With the enforcement of GDPR in Europe by the regulatory agencies, retail players are now taking more serious steps toward better practices and control for implementing consumer privacy,” Iqbal said.

You can also find out more about the following: H&M data protection violation fine The industry was astonished. As the report states, retailers should not only be concerned about data privacy because regulators are enforcing it.

Iqbal suggested that they should look into it, as their customers demand it.

Climbing the Digital Trust Index

The findings in the report reinforce that privacy and safety are not negotiable. The majority (89%) of customers are willing to give their data to organizations.

But there are some caveats that cannot be negotiated. In the last 12 months, for example, more than a quarter (30%) of consumers abandoned a particular brand because it required too much personal data.

“Although all businesses must comply with international laws on data privacy, those at the bottom of the ranking have had fewer directives addressing data security and data privacy,” said de Vreeze.

Consumer preferences are evolving and as more businesses increase their digital presence, non-regulated industries can learn from this.

More than four out of five people (87%) are expecting some privacy rights from companies with which they interact online. The right to know that data is being collected is the most common expectation (55%), followed closely by the right of erasure (53%).

Online customers are also expecting more concessions from businesses in regards to privacy standards. 39% want the right of correction, 33% to ask for a copy and 26% to move their data between platforms.

Online Frustrations Increase Brand Loyalty

Thales’ report highlighted that a smooth website experience is crucial to retaining customers, regardless of privacy concerns. Customer concerns extend beyond how online services handle their data.

Organizations must not only adhere to the privacy requirements, but also provide a seamless experience online to gain their customers’ confidence. Consumers are becoming more time-conscious. Over a fifth of consumers (22%) say they will abandon an online experience if it is frustrating.

The number one complaint of respondents was advertising pop-ups (71%), followed by having to reset passwords (64%), or entering personal information again (64%) According to the survey, 59% of participants cited complicated cookie options as their biggest frustration.

“Our findings revealed that 93% consumers abandon an online brand in five minutes or less when they have a bad experience. 25 percent of consumers give up in the first two or three minutes. This means that companies have only a short window of opportunity to provide the users with digital experiences they desire,” said Iqbal.

Lip Service no Longer Effective: Consumers Demand Action

Iqbal’s observations of retailers’ reactions show that they won’t be able to continue merely lip-service about data security and privacy. With GDPR as the predecessor to any U.S. legislation — and following actions like California’s CCPA and Virginia’s VCPA — he sees more regulatory action taken for consumer data rights.

He predicted that “with more scrutiny than ever before on large language model (LLMs), and where they obtain their training data from, this conversation will become even more important. This will ensure legislation makes the right to privacy non-negotiable just as the report respondents request,” he said.

Iqbal, the author of the report, states that emails (40%) as well as phone calls (28%) have become popular channels for communication not only in retail but in many other industries. Retail services are facing a significant increase in channels and touchpoints.

It’s not just the banking industry that has a strategy to create omnichannel experiences. Retailers continue to place great importance on in-store/in person communication (32%) as a form of communication. “The industry must embrace this reality, and work towards creating a consistent omnichannel customer experience,” he said.

What is the end game?

Iqbal says that trust isn’t a monolithic idea, particularly in the digital age. Each organization must develop its own formula to measure trust.

Thales understands that trust is nuanced and can vary from industry to industry.

Iqbal explained this understanding as to why organizations must have basic capabilities in their digital channel to tweak data security controls and data privacy. When a company is unable to respond quickly or effectively when it discovers why a consumer has abandoned a product, for example, the company will be faced with a steady flow of customers.

Iqbal concluded that if you still rely upon legacy, monolithic systems in order to address the rapidly evolving needs of consumers and regulators, you will not be prepared for the next decade.