Over half of consumers decided against online purchases | KPMG | NZ

NEWS -- Over half of consumers have decided against an online purchase due to privacy concerns

Over half of consumers decided against online purchases

Companies failing to see privacy as a fundamental business priority risk crossing the ‘creepy line’.

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Head of Consulting, Head of Government and of IARCS Advisory Services

KPMG in New Zealand

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Customer, staff and other stakeholder’s trust and confidence is increasingly aligned to an organisation’s ability to demonstrate strong privacy performance. Many New Zealand organisations face challenges with

ensuring information is handled appropriately and privacy risk is managed
effectively. 

Souella Cumming, National Privacy Lead for KPMG New Zealand, said “although using customers’ personal information to inform
insights and tailor services may improve the customer experience, many Kiwis are uncomfortable with this”. The appropriate balance needs to be struck between harvesting the value of information held with the protection of individual’s privacy.  

A recent survey by KPMG International surveyed 7000 members of the public in 24 countries, including New Zealand. The findings show that New Zealanders have a high awareness of certain practices regarding security and privacy, and a high concern about the way companies handle their personal information.

According to the report by KPMG International summarising the privacy findings, 55 percent of consumers globally said they had decided against buying something online due to privacy concerns. Furthermore, less than 10 percent of consumers feel they have control over the way organisations handle and use their personal data today, with respondents in most countries saying that privacy control is more important than the potential convenience gained from sharing personal data.

“An executive would be at risk of being fired if half their customer base disappeared after they made a crucial business decision,” said Mark Thompson, Global Privacy Lead at KPMG. “Failure to imbed privacy into the DNA of their business strategy could ultimately lead to the extinction of a business given how closely consumers and regulators alike are paying attention to how organisations collect, store and use personal data.”

Understanding consumer sensitivities

When it comes to the global attitudes on the usages of personal data, consumers draw the line in dramatically different places.

What one consumer finds‘ creepy’ …

  • 82 percent are not comfortable with the sale of their data to third-parties in exchange for the speed, convenience, product range, home delivery and price comparison that online shopping offers
  • 55 percent said a free fitness tracking device that monitors the well-being of users and produces a monthly report for them and their employer is crossing the line

Another finds cool…

  • 78 percent think telematics devices that enable emergency services to track their customers’ vehicles are a good thing
  • 57 percent are happy to have a smart energy meter installed that enables a provider to deduce how many people live in a home, when they eat and sleep, and the appliances used

While concerns around the “creepy line” vary, the overall top 3 concerns about the way organisations are handling and using their personal information were: unwanted marketing; personal information being sold on to third-parties and lack of secure systems. The survey found that strong cyber security systems (32 percent) are the most effective thing an organisation can do for customers to trust them with their personal data. 

Data sharing

Over half of survey respondents said they were willing to share their gender, education or ethnicity online, while a considerably lower proportion were happy to share more sensitive information, such as location (16 percent), address (14 percent) or medical records (13 percent).

Consumers are increasingly taking matters into their own hands, with half of survey respondents saying they already delete their internet browser cookies or manage their social media settings.  Almost one-third even use incognito or 'do not track' modes, while a quarter percent use encryption.

Other global highlights

  • 57 percent of people fail to read, or only skim, privacy policies on entering websites
  • Unwanted marketing (59 percent) was cited as consumers’ top concern about businesses using their personal data, followed by their data being sold to third-parties (58 percent) and organizations having unsecure systems (55 percent)
  • Over two-thirds of people are not comfortable with smart phone and tablet apps using their personal data
  • In all markets but one, at least 75 percent of respondents said they were uneasy with their online shopping data being sold to third-parties.

New Zealand and Australia regional findings

  • Respondents had a perception of ‘creepiness’ in New Zealand and Australia as high (on a scale of low, medium or high)
  • New Zealanders and Australians responded with a medium awareness of certain practices regarding data and security
  • After Brazil, New Zealand had the second lowest percentage of respondents that read privacy policies when setting up a social media profile 
  • New Zealanders are the most likely to use ad blocking software to protect personal data
  • Of non-European countries, Australians are least likely to read a privacy policy when entering a website 

For companies seeking to use personal data to personalise their marketing and services to the individual, build brand loyalty and develop better products, it is important they understand that although opinions on privacy vary around the globe, it is clear that, more then anything, consumers value privacy over convience.

"Understanding the value exchange between access to personal information and trust that has never been more important that it is today.  "I truly believed that everyone would take a free TV no matter what.  But clearly transparency is the strongest currency of any business.

Crossing the line

Crossing the line

Staying on the right side of consumer privacy.

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