The privacy paradox is the persistent gap between the value consumers say they place on privacy and what their behavior reflects, uncovered in consumer surveys and behavioral experiments over the past two decades. People say that they’re disturbed by threats to their privacy, and yet they continue giving away unlimited personal data on social media platforms and engaging in other types of risky online behavior.
The gap exists, in part, because:
The gap is large and growing in Western countries but smaller in Eastern countries and among older demographic groups. With AI and government and workplace surveillance on the rise, and revelations spurred by automated privacy enforcement, this could change. Some will be more concerned about privacy protections while others will embrace growing opportunities to share personal data for socially beneficial purposes.
Speedier consumer adoption of new technologies and market techniques will be needed to justify corporate investments in accelerating digital strategies. Companies bringing traditional paradigms into a new age or geographical demographic will face lower returns unless they adapt to the continually evolving privacy and value expectations of those new demographics. Consumer-facing companies that can outrun competitors through a better mix of price, quality of product and service, and flexibility of privacy controls stand to gain the most.
A potential goldmine awaits companies that break the paradox and offer privacy options catering to a wide array of context-specific privacy buying attitudes among their end consumers. Without a robust consumer privacy experience — one that offers simple, easy choices throughout the customer life cycle, from acquisition through purchase and renewal — companies are leaving money on the table. Abandoned shopping carts and loyalty program sign-ups are telltale signs of consumers who are not just price shopping but giving up because of privacy concerns related to overcollection, overuse or oversharing.
“In Canada, we're already seeing consumers vote with their wallet with companies that offer rewards and financial incentives along with more personal control over their data. These companies are getting more creative about the data-value exchange — even setting up ‘data for good’ programs where consumers see rewards for their data in ways that not only benefit them but society at large.”