Consumers have become increasingly savvy about how businesses are using information disclosed on the web. In fact, a recent study showed 75 percent of consumers are now wary of shopping online because of such disclosure fears, which is costing business roughly $15 billion annually.
Moreover, it's estimated that online commerce would double if consumers had greater confidence that their privacy was being protected online. Lack of confidence in privacy outpaces all other online concerns – including price and ease of use – in inhibiting people from buying on the web.
Privacy works very differently on the web than in stores. Even if you're just window shopping on the web, more and more sites now require you to register or accept a 'cookie' so merchants can track your internet travels.
Consumers are wary that a social security number entered online could wind up in an identity thief's hands. They fear that a phone number or email address given for 'questions about your order' could quickly turn into dinner-time sales pitches or junk emails. And they want it to stop.
So when some consumers go to a web site and are asked to fill in their name, address, age and income levels, they give a bogus identity to avoid being tracked.
The privacy issues we're dealing with today are trivial compared to what's ahead. What are the implications for individual privacy in a world where millions of people are driving internet-enabled cars that monitor their movements at all times? What happens to privacy for millions of people with internet-enabled pacemakers? Who has access to real-time data on your heartbeat, blood pressure and cholesterol levels? You? Your doctor? Your insurance company?
The answer must begin with a responsible marketplace. Through business policies and practices, the internet-technology industry must send an unambiguous message that tells people: "You can trust us. You have choices. They will be respected. And you'll know in advance how any information you give us will be used."
If businesses build relationships with customers based on trust, customers will ask to be added to mailing lists or to have products recommended. They'll stick by those businesses forever.
Here are some guidelines for consumers interested in protecting their web privacy:
Be aware that data needed for processing your transaction might be used for marketing studies. Make suggestions if you think a company can do more to protect consumer data or reduce the amount of information being collected.
At the end of the day, privacy can work – both for consumers and businesses. But strict practices and standards must be instituted and followed.
Lou D'Ambrosio, a Philadelphia native, is vice president of worldwide sales and marketing for IBM Software.