Consumers still squeamish about third-party data sharing
Even with generations of people now comfortable using technology for all manners of purchasing, a majority of consumers have not warmed up to the idea of having their data sold to third parties by loyalty programs. According to a study by the Pew Research Center reported by Advertising Age, only 47 percent were comfortable with loyalty program tracking and sharing data with third parties.
The study reported that older respondents were generally less comfortable sharing loyalty program data than younger respondents. The survey further showed that people with household incomes above $30,000 were less likely to be comfortable with data sharing than people with household incomes below $30,000.
The study went on to say that 32 percent said it was unacceptable for retailers to collect shopping data and sell it to third parties and 20 percent said, “It depends.”
For those hoping to avoid alienating customers, it may be important to look at the factors on which “it depends.”
An earlier survey reported by Business News Daily suggested that customers may avoid a loyalty program if asked for too much data up front. That article reported customers were turned off by programs that accessed social media status updates and offered rewards based on profile content or personal information.
In light of the recent survey, one reason these requests may overstep a customer’s comfort level is that they confirm the use of personal data. A comment by an Ad Age survey participant indicated that people may accept data sharing when they just aren’t aware of it.
“The ‘selling to third party’ part makes me worry,” said the survey participant, “[On the other hand], I have and frequently use a Safeway rewards card, which I suspect has just such an agreement.”
Resignation may be the most material factor behind public acceptance of such measures. Research also quoted in Ad Age and recently presented by the Federal Trade Commission indicated that 57 percent were “resigned” to data sharing, with only 32 percent stating they supported trading data for rewards.
- Less Than Half of Consumers Are OK With Swapping Data for Deals – Advertising Age
- Do Customer Loyalty Programs Require Privacy Sacrifices? – Business News Daily
How serious should loyalty program managers be about appeasing consumer privacy concerns? Would retailers be better or worse off implementing loyalty programs that do not make use of third-party data sharing?