Retail chiefs fear tightrope between privacy and data

Retail marketing chiefs might be waking up to the benefits of embracing first-party data but the vast majority (78%) are concerned about building privacy-centric experiences that meet consumers’ growing demands for the responsible use of their personal information.

So says a new study by AI-driven performance marketing firm Wunderkind, which quizzed 100 senior retail executives in for its 2024 CMO State of the Union Report and found that many chiefs are feaful about how to get the balance right between data privacy and personalised shopper engagement.

It follows a study by WARC, published earlier this week, which urged marketers to get in shape for the data-driven future of the advertising business, with first-party data, combined with new AI enhancements, set to sit at the heart of the industry “for the next decade and beyond”.

Even so, Wunderkind’s research points out that among those whose brands do not use first-party data, 68% say growing consumer privacy concerns are the main issue holding them back.

This issue is being borne out by shoppers, with 80% of UK consumers saying they are worried about how their personal data is mined and used online. And, while 93% of UK brands claim to be transparent with customers about how they use their data, only 40% of customers agree.

Meanwhile, according to a study from PrivacyEngine, three-fifths (60%) of the public believe their data is routinely misused by companies.

Wunderkind suggests this “data trust gap” is not only affecting consumers’ faith in brands and negatively impacting brand perception, it is also influencing where shoppers choose to spend, with transparent data use and privacy playing a key role in authentic retailer-shopper relationships.

Wunderkind International general manager Wulfric Light-Wilkinson said: “In an era where privacy concerns are at the forefront of global discussions, the way retailers and technology providers work with handling consumer data has never been more scrutinised.

“Recent announcements, such as Google’s decision to move towards an Apple-style model of giving consumers control over third-party cookies through explicit opt-in or opt-out options, highlight the importance of data privacy, but – perhaps even more importantly – also giving consumers choice and control of their own data when shopping online.

“The transition away from third-party cookies is pushing marketers to innovate with first-party data collection and other privacy-centric solutions. While this shift poses challenges, it also opens the door to more ethical and sustainable data practices in the industry, paving the way for a new era of responsible marketing.”