Why Australian brands need to step up to the PRIVACY plate and stop treating customers with contempt
A month ago, I sat around a table talking about privacy with senior leaders, and what became obvious to me as I sat in a room of seasoned leaders is that when it comes to privacy many Australian leaders still under-estimate the true importance of privacy to Australian consumers, and to some degree are treating consumers expectations with contempt. That sounds extreme but I personally believe that until the government reforms the Privacy Act down under, Australian brands will continue to do only what is required by them by law and pay lip service to consumer needs.
This month the Office of the Information Commissioner released the latest Australian Community Attitudes to Privacy Survey and it has reinforced not only the importance consumers place on privacy but it demonstrates the lack of knowledge consumers have about how best to protect themselves, and it reinforces that consumers are looking for brands to lead the way.
Don’t confuse a lack of consumer action with appetite
If consumers really cared about their privacy, they would be taking far more steps to protect themselves, right? In 2022, Apple rolled out the option for consumers to opt in to be tracked via apps and what happened next demonstrates what consumers will do when the choice is there and the process is easy. In the case of Apple tracking, 72 per cent of Australia's Apple users chose to opt out of tracking, making a pretty strong argument for how much consumers care about their privacy. The problem for consumers today however is that they are time poor, they lack the knowledge to fully protect themselves and brands aren’t making it easy for consumers to protect themselves within brand environments.
According to the study, 83% of consumers care enough about their privacy that they are willing to do something about it. However, many simply don’t know how, with 49% of consumers unsure or disagreeing with the statement that they have a clear understanding of how to protect my personal information. When asked if organisations should do more to protect personal information, 62% of consumers stated that they want organisations to do more to protect their information – placing the onus squarely on brands to lift their game. That may seem like a cop out by consumers, shifting the onus onto corporations and businesses but it stands to reason that this is the case. With consumers increasingly spending 6+ hours online per day across countless social media sites, websites and apps, each with different mechanisms and approaches to manage consumer data, its easy to see why consumers are challenged by how to best protect their privacy.
But what are consumers willing to do to protect privacy? With the high prevalence of SCAMs in today’s market, it stands to reason that more precaution around scams tops the list of actions consumers are taking. But what is interesting is when choices are made overtly and easily, consumers will take a number of practical steps to reduce the amount of data being captured about them and limit what can be done with that data. The study has found that 37% will ask websites not to track them when prompted, 25% will manage or refuse cookie data capture when accessing a website, and 31% turn off location sharing amongst others. The interesting thing about all of these is that they are often options delivered through prompts rather than requiring the consumer to seek out ways to manage their privacy. But today many of these options are not standard practice across all Australian brand experiences.
Growing calls for transparency over what is mine
The study has found that only 30% of Australians are satisfied that they can access and use the data organisations hold about them. Australians aged 35 and older are twice as likely as those aged 18 to 34 to not know the extent to which they can access and use their personal data (30% 35+ years, cf. 15% 18–34 years). Whilst there is many complexities that exist for organisations to make this data available, it stands to reason that consumers want | desire to be able to access information about themselves held by an organisation and potentially request for that information to be erased. The complexities in execution were laid to bare recently in an experiment undertaken by a NZ journo.
When Business Desk journalist Victoria Young requested the information held about her by The Warehouse Group, she got hers and then some. Among the data she received under a Privacy Act request was the private information of three other Victoria Youngs. In NZ, personal information can be requested from a brand unlike here in Australia where this is currently not the case. Among data about her, the retailer listed the contact details, including emails, addresses and phone numbers of several other people called Victoria Young.
Where data is shared is more important than you think
One of the key themes emerging from this year’s study is the importance and emphasis placed on where consumer data is stored. Whilst concern from younger Australian’s is lower, we see concern at all levels and concern growing with age. 91% of Australians have a level of concern with personal information being shared overseas and 41% very concerned. This is an interesting conundrum for brands as not only does this relate to where data is stored within platforms, but brands need to consider what is ethically right to do when it comes to sharing data with search engines and social media platforms, particularly as social media platforms ranked lowest on trust by industry sector – ranking lower than real estate agencies.
When it hits the bottom line, brands are more likely to step up to the plate
If recent data breaches are anything to go by, organisations move into swift action when their hands are forced and their backs are against the wall. But what many brands don’t realise is that it is already influencing the bottom line.
74% of Australians aged 45 and older place high importance on their privacy when choosing a product or service. But what does that mean in practical terms for the experiences we create?
Consumers are looking at any array of practices and ques to determine if they trust the brand with their data whilst purchasing the product. Of particular importance is what information is needed to provide the product or service alongside of being re-assured that their information is protected. So important is it becoming, consumers ranked it behind quality and price as one of the key drivers of choice when selecting products and services.
What this tells us is that by design, privacy needs to be baked into the many experiences we are creating to instil trust when it matters.
Once a data breach has occurred, the message from consumers is loud and clear about the action they would take, with 47% moving to consider closing their account or no longer using a product or service. Mitigating the fall out from a breach in terms of loss of customers starts in the data collection phase. When brands are more selective about what they capture and why, they potentially reduce the risk for the consumer downstream if a breach occurs and stem the potential exodus of dissatisfied customers.
Our approaches don’t past the sniff test, we have to work harder to earn the right to leverage data
One of the most telling parts of the study is whether or not consumers perceive certain actions to be fair and reasonable when it comes to data privacy. When asked if it was fair and reasonable to use Ai to inform decision making that has a significant effect on an individual, 70% said it was not fair and reasonable. The challenge for brands is that often they don’t set out to harm by leveraging it, it can sometimes be an unintended consequence which makes it a tightrope to walk. Whilst nearly 7 and 10 also said it was not fair and reasonable to use online tracking, profiling and targeted advertising to adults using personal information. With greater community pressure to formally define online advertising as a form of direct marketing, this latest data does not bode well for brands hoping for a reprieve when changes are announced. 87% of consumers also stated the sale of personal information and tracking of a location when not required was not fair and reasonable.
What all of this data is telling us is that brands need to do a better job at not only explaining the value of how data is used, but demonstrate it in action. This will be no easy path, as many brands have rested on their laurels and have been able to utilise information at their disposal without the need to work for the right to engage.
Arktic Fox is helping some of the biggest and best Australian brands as well as scale ups to define their customer data strategy and conceptualise and develop great experiences. Find out how we can help.