Privacy Policies Promote Purchases

Today, one of the most important aspects of doing business online is the ability to build a certain trust among the people with whom you do business. Scams, snake oils, and get-rich-quick schemes have somewhat found a niche on the web, and people are understandably cautious, as well as leery, of making a purchase via the web.

A recent article on Internet Day revealed an interesting statistic. It explained that 64% of online orders are abandoned at some point before being processed. In other words, people will visit a site, decide that they want what it offers, proceed to the ordering page, and provide all the relevant details. But over half will abruptly end their purchase the moment they are confronted with the dreaded "submit" button.

Concerns about security and privacy are definitely at the root, for people fear that their information will be shared or misused. It is therefore exceedingly vital for an online business to not only communicate a certain level of credibility but also an assurance that potential clients are not abused in any way. Some statistics prove this undeniable truth.

According to a recent survey conducted by AT&T Laboratories, research suggests that "a combination of privacy policies and 'seals of approval' can significantly raise people's confidence".

It also found that people are willing to provide simple information such as their names and even their e-mail addresses to a certain extent. But when it comes to unique identifying information such as their age, phone numbers, postal addresses, credit card numbers, and social security numbers (or social insurance numbers for us Canadians), they run away.

AT&T's Lorrie Faith Cranor, the author of the study, mentioned that people are willing to give information -- although with a certain degree of trepidation. But what concerns them the most is the sharing of that information. More precisely, knowing what a site will do with one's information is at the heart of the issue. She wrote: "Information to be shared with other companies or organizations is more sensitive. While respondents were concerned about the kind of information they provided to a web site, how it would be used, and whether it would identify them, the most important factor was whether it would be shared with others."

The crux of the survey is the fact that people felt most pessimistic about a site's use of "cookies," which are pieces of data that a web site uses to "brand" a user's computer in order to identify them throughout the site let alone other sites on the Internet. "52% said they were concerned about cookies," Cranor points out. "And most people said they had changed their browser settings to something other than accepting all cookies without warning."

In comparison to an earlier study conducted in 1998, the numbers have increased significantly. While the percentage of consumers online have tripled in less than a year, concerns about threats to their personal online privacy rose to an astonishing 87%.

In a comparable Georgia Tech study, called the GVU or "Graphics, Visualization, and Usability" survey, researchers found that 62% of respondents valued privacy over convenience when it comes to buying online. In other words, they found that privacy is a key determinant in the number of online purchases.

According to the TRUSTe organization, the Internet privacy gurus, consumers' fears about privacy impede online sales and therefore limit e-commerce growth. In fact, they mention a recent BCG Consumer survey, which found that 70% of respondents worry about making purchases online and that, if their privacy concerns are successfully addressed, the likelihood that they will buy will multiply immensely.