Few consumers trust retailers to use their data responsibly, research finds

Dive Brief:

Just 1 in 5 U.S. consumers trust retailers to use their data responsibly, according to a Press Ganey Forsta survey of 2,000 people released Wednesday. 
However, more than two-thirds of U.S. consumers say they are willing to share their data if it results in more personalized and rewarding customer experiences. Fewer than one-third say they would consider switching retailers for a more personalized experience.
Not all demographics feel the same about their data. Nearly 2 in 5 Baby Boomers say that personalization either doesn’t matter to them or that they would never share their data with retailers under any circumstances.

Dive Insight:

Retailers that want customers to trust them with personal data need to offer shoppers both value and transparency in return.

As a baseline, retailers need to make sure that any data sharing is a trade off worth the potential downsides, according to Rebecca Becker, VP of retail experience solutions at Forsta. A combination of experience and communication is key to earning trust.

“Today’s consumers are highly selective about the data they share – not because they don’t want personalised experiences, but because they want assurance it’s being used responsibly,” Becker said in an email. “Clear communication, secure systems and immediate benefits like personalized discounts, early access and convenience features all play a role.”

Retailers should also make sure customers know their data is enabling these benefits, according to Julie Geller, principal research director at Info-Tech Research Group. Consumers are more willing to share if they know how their input will lead to better experiences.

“Retailers need to move beyond viewing data collection as a compliance checkbox or a one-sided request for information,” Geller said in an email. “Both transparency and consent are critical, but what sets leading brands apart is how they design data-sharing moments as part of a mutual value exchange.” 

Data sharing and trust building are each part of an ongoing relationship between customers and retailers, according to Geller. The most effective companies combine first-party signals with zero-party inputs, like style quizzes or delivery preferences, to show the customer that they are actively listening and adapting to their needs.

While security breaches harm trust, the damage isn’t irreparable, according to Becker. Rebuilding trust can be a matter of offering great experiences that put the customer first and continue to prove that their data is making their shopping experiences better. 

“Retailers need to prove this value by offering tailored offers, loyalty rewards, and seamless service across digital and physical channels,” Becker said. “Repairing trust isn’t just about better tech, it’s about showing customers they’re seen and valued as individuals.”