--- description: First-party data helps companies tailor their services but proper consent must be obtained from the public first. Are companies doing enough to earn this trust? image: https://gdm-localsites-assets-gfprod.imgix.net/images/getapp/og_logo-94fd2a03a6c7a0e54fc0c9e21a1c0ce9.png title: Research study: UK Consumer concerns about data privacy --- # 88% of online shoppers would stop using firms that don’t value consumer data privacy Canonical: https://www.getapp.co.uk/blog/3197/online-shoppers-avoid-companies-not-value-data-privacy Published on 07/11/2022 | Written by David Jani. ![88% of online shoppers would stop using firms that don’t value consumer data privacy](https://images.ctfassets.net/63bmaubptoky/Npm6UdFIF9kASj5D3ug0u-zcC4gTDETU_z4B9RjvUMg/74b2ac5a5b4cd94f72abddda7513d1ce/First-party-consumer-data-privacy-UK-GetApp-header.jpg) > Data drives online business, but with that power comes great responsibility. Businesses that collect, store, and process first-party data must comply with the General Data Protection Regulation (GDPR), which protects consumer data privacy and states consent is vital at all times. This makes trust key to obtaining essential information from the public. Are companies doing enough to establish that confidence? ----- ## Article Content Data drives online business, but with that power comes great responsibility. Businesses that collect, store, and process first-party data must comply with the General Data Protection Regulation (GDPR), which protects consumer data privacy and states consent is vital at all times. This makes trust key to obtaining essential information from the public. Are companies doing enough to establish that confidence?In this articleWhat is first-party data?What type of data is most sensitive for consumers?Why do users share their data in the first place?What are the costs to companies that don’t protect first-party data?How serious are the consumer concerns about data privacy?First-party data lessons for SMEsFormulating a first-party data strategy is a detailed process and requires a good understanding of the incentives and pain points of the online audience at large. It also requires regular resources to ensure that data is kept protected and complies with legal regulations. More importantly, obtaining first-party information requires a high level of trust from the public.How does the public feel about sharing data with companies, and what can incentivise them to do so? To find out, we asked 1,019 UK online shoppers aged between 18 and 65 years old what they thought. Our full methodology can be found at the end of this report.What is first-party data?First-party data is information that a company collects from its own sources. In the case of online businesses, this will be any data collected on users from its apps, website, and digital marketing channels.This differs from third-party data, which is obtained from external businesses or entities. First-party data must not be shared externally without consent from the user(s) concerned and must be kept secure at all times to comply with data privacy rules in the UK. Why is first-party data so important?First-party data is important because it makes it easier to personalise a customer’s user experience and target online advertising to specific audiences. Simply put, the more you know about the person accessing your product or service, the easier it is to adjust your offering for their specific needs.Since Google announced the phasing out of third-party cookies, gathering first-party data has become especially important, and businesses have had to reassess their data collection strategies. As it is much harder to obtain data from external sources, businesses need to rely more heavily on the information they collect first-hand from people accessing their digital channels.What do companies need to tell consumers when collecting first-party data?Many important rules must be followed when collecting data from users. The Information Commissioner’s Office (ICO) sets out a cornerstone of UK data consumer protection, the ‘right to be informed’. It sets the minimum threshold for what users must know about the data being collected from them.To make sure people understand how you will collect and use their data, companies must make sure to detail the following at the time of its submission clearly:The data being collected and usedThe reason why their data is being usedHow the data will be usedHow long the data will be storedWhether or not the data will be transferred to third parties or overseasHow they may contact your organisationWhat type of data is most sensitive for consumers?The use of personal information to provide improved online services brings with it big questions about data privacy . It is, therefore, important for companies to have a good grasp of the first-party data they collect and how they can keep it secure.Businesses use many types of data that could be considered sensitive, from names and addresses to data about healthcare treatment. It would stand to reason that the more sensitive and valuable the data, the more likely people are to be cautious about sharing it.When we asked our participants to rank different types of commonly collected first-party data by its level of sensitivity, we observed several clear trends.Whilst financial information was the most sensitive of all, with 71% labelling it as ‘very sensitive’ a more surprising discovery was that less than half of respondents considered health information highly sensitive. 15% of our participants said health data was not sensitive, a curious observation considering how valuable private health data can sometimes prove, not to mention controversial.  At the other end of the scale, gender identification data had the lowest score for being very sensitive (17%). Additionally, information pertaining to website tracking wasn’t regarded as highly sensitive by many, with website behaviour (26%) and website search history (34%) among the bottom five.This information tells businesses much about prioritising and capturing data without causing users too many pain points. By knowing the data that is considered most sensitive, they can effectively design processes that can extract the most data possible without creating friction for users.  What do SMEs need to consider when collecting sensitive data?What is clear from our findings is that there needs to be a reason for collecting sensitive data from online shoppers, one that has a tangible effect on the use of your business or service.For example, asking consumers for a date of birth would require them to hand over information that could be used for identity theft. However, it might be necessary to get this from users to gatekeep age-sensitive content to justify the use case.Using sensitive information is sometimes a necessary evil. Yet when it is needed, it should be for clearly justifiable reasons that relate to the usage of an app or service.To avoid processing sensitive data without the right legal grounds, ICO has provided a guidance tool. Company leaders should use this to assess whether they have a lawful basis to collect certain data before processing it.Why do users share their data in the first place?Users voluntarily surrender their data to companies for a lot of reasons. The first and most important of these is to access online services, but that isn’t the only benefit they can gain.Companies can offer extra incentives for users to provide contact or personal information. That can involve anything from signing up for an email newsletter to entering a competition.  We asked our survey sample which of these options was the most attractive to them when they were required to share their name, occupation, and email address with a company. Knowing already contact information is the second most sensitive form of data, according to our participants, it would stand to reason that they would want something of value in return for sharing this information. In many cases, we observed this transactional approach at play.The most popular incentive for our sample of online shoppers was receiving vouchers (62%) in return for providing their name, occupation, and email address. We also saw a high prevalence in other types of rewarded behaviour, such as providing details to enter competitions (45%).However, the recurring reason people were willing to enter their details was to access content or services. 56% of our participants said they would be ok to share personal data to register for a new user account with a company. Additionally, 34% would do so to download a mobile app.Interestingly, only 30% in total said they would share their personal information for informative purposes, such as accessing reports or webinars. This suggests that educational incentives for users and readers are a much lower priority than the provision of website services or the promise of savings and prizes.Do users enter accurate information?Whilst there would seem to be some resistance to companies tracking their activities, it was also seen that participants were at least willing to engage with businesses honestly.We asked our sample if they had ever entered false personal information to access website content. Most people (37%) said they never provided fake details, while only 5% said they would always enter incorrect data.This finding indicates that despite a predictable but small minority of dishonest users, most online shoppers will operate in good faith. This is good news for companies collecting first-party data as it suggests that most information collected from consumers can be assumed to be accurate and of high value to a business.What are the costs to companies that don’t protect first-party data?As we’ve already seen, most users are willing to provide first-party data, even if they don’t always fully trust online vendors to store it or keep it secure. However, this trust, if broken, can come with serious consequences.Firstly, it’s worth remembering that improperly handling data on its own can lead to legal ramifications such as fines and other sanctions. Non-compliance with regulations can be calamitous for any organisation, either big or small. ICO notably fined British Airways £20 million following a data breach that revealed the personal details of 400,000 of its customers. More recently, TikTok has been investigated by the data protection watchdog, which alleged that the company had processed special category data without a legal basis. Special category data includes sensitive information such as ethnic and racial origin, sexual orientation, and religious beliefs. The social media company faces a potential fine of £27 million.However, compromising data privacy can have an equally detrimental effect on customer confidence in your business. When we asked our survey group if they would stop doing business with companies they felt didn’t value the privacy of their personal data, the results were almost unanimous.Nearly 90% of UK online shoppers said they would stop doing business with companies that they felt didn’t handle their data properly. This is a stark reminder to companies of the damage that could be done to their reputation if their consumer privacy practices are deemed to have fallen below an acceptable standard for consumer privacy.Therefore, it is not only essential that no data breaches occur, but it is also vital that a perception of professional handling of data is also communicated.Tips for SMEsSafe and secure data storage and systems are critical if you are processing first-party user data. A data breach could destroy customer trust and cause massive damage to your reputation.There are many varieties of security software that can make the job of data protection easier for SMEs handling sensitive information. These include:Cloud security softwareComputer security softwareNetwork security softwareWebsite security softwareHow serious are the consumer concerns about data privacy?We already know that undermining consumers’ trust can come at a heavy price. However, we wanted to explore further how people feel about sharing data in general right now.To get a feel for this, we asked our participants to rate their agreement with the statement: ‘I am nervous to share personal information with companies online’.Again, our survey-takers were mainly in agreement.Our findings indicate that online shoppers mostly feel concern and don’t fully trust the sharing of personal information. 62% of respondents overall agreed on some level with the statement. By comparison, only 10% disagreed. This is also not the first time we’ve observed such a level of reluctance amongst the public regarding using their data this year. In our earlier study on checkoutless shopping, a combined 81% said they felt some level of concern when sharing personal data with grocery stores with this new technology.These findings show that consumer concerns about handing over data for a service should be treated as somewhat of a sunk-cost fallacy when requesting first-party data. Therefore, companies need to find suitable ways to quell these fears as much as possible when data is required from their audience, such as providing better transparency of what it will be used for. What could encourage users to share first-party data?As we’ve already seen, there are many reasons the public can be incentivised to hand over personal data to companies. However, how much of this comes down to using transparency as an incentive?Overall, the results show that the majority of respondents (83%) would be more willing on some level to share first-party data with companies, as long as there was proper transparency on how and why it was collected. Yet, only 7% of participants said they would be ‘much more willing’ — fewer than the 17% who said they wouldn’t be more willing to share data if there was more transparency.Again, this reinforces the idea that companies must always consider a certain reluctance amongst their audience when sharing data. When asking for user consent and planning effective digital marketing strategies, this needs to be factored in.First-party data lessons for SMEsHandling first-party data is a big responsibility for companies and it must be handled properly. This is for many reasons, not least the legal obligation to do so, but trust is crucial to get the data necessary to optimise services. What we learned from our results offers the following vital lessons for SMEs:Businesses should prioritise the security of very sensitive data, such as financial, contact, and health informationOnline shoppers will most willingly enter first-party data to receive services, or gain vouchers and prizesNot demonstrating that your company values the privacy of user data can destroy trust and lose customersMost UK web consumers are nervous about sharing their data online and steps should be taken to reassure them  Many companies can’t provide their online services as efficiently without data, so this is a process that must be addressed correctly by owners and managers. The costs for not doing so can be dramatic. Companies must also remain mindful of how the public can mask its identity from data collectors. In the second part of this examination into first-party data privacy in the UK, we’ll focus more on the extent that audiences use protections to limit data collection by companies and third parties and how businesses should respond.Looking for GDPR compliance software? Check out our catalogue. ## Disclaimer > MethodologyThe data for GetApp’s 2022 First-Party Data Survey was collected in September 2022 and comprises answers from 1,019 participants. We selected our survey sample based on the following criteria:UK residentsAged between 18 and 65 years oldShop online at least once per monthNOTE: This article is intended to inform our readers about business-related concerns in the United Kingdom. It is in no way intended to provide legal advice or to endorse a specific course of action. For advice on your specific situation, consult your legal counsel. ## About the author ### David Jani David is a Content Analyst for the UK, providing key insights into tech, software and business trends for SMEs. Cardiff University graduate. 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