A study from the Journal of Consumer Research shows that people buy less when they are
It turns out that when companies spy on you online, you’re not just scared; you’re actually less likely to buy something, according to a new study.
The article, published in the Consumer Research Journal by Yonat Zwebner, assistant professor of marketing at the Arison School of Business at the Interdisciplinary Center, a university in Herzliya, Israel, and Rom Y. Schrift, associate professor of marketing at the Kelley School of Business at the University of ‘Indiana reviews the results of eight studies that found that when consumers know they’re being watched while deciding whether or not to buy something, they really don’t like it. In fact, they hate it so much that they stop trying to figure out what to buy and walk away from the point of sale or choose the easiest default purchase option.
At least part of the study – the tracking component – has been happening online for years through the sites’ use of cookies, small pieces of data that identify your computer and keep track of your browser activity. . Sites are generally required to ask for a user’s consent to track cookies; however, what it actually looks like – and whether the sites actually do it – is a mixed bag. (Only 11% of sites comply with consent notice regulations in the UK; regulations are even more lax in the US.) Companies do all of this to determine if you’re interested in buying something and increase sales, but this study suggests the practice may have the opposite effect.
Consumer spending dropped significantly when subjects knew they were being watched, according to the Zwebner study, which found that 41% of participants walked away without making a purchase, compared to 20% of those who didn’t. Were watched only when making their final choices or weren’t watched at all.
So what should businesses do if they want to increase sales but don’t want to scare people away? A company can use pop-ups or chat boxes to encourage users to ping customer service if they want help, but they shouldn’t offer detailed suggestions that imply they know exactly what. that customers are looking at (“I saw you were looking at that green cable knit sweater — it’s sold out in size medium”, for example). This less Big Brother-y approach encourages the customer to buy something without point it in a specific direction, according to the study.
Some companies are starting to get it. Firefox blocks third-party cross-tracking cookies by default because they are so invasive; Google has announced the introduction of a new API called “trust tokens”, which can verify users who click on advertisements without giving out personal details. So we already know that consumers are tired of companies tracking their every move. If they need another deterrent, it’s this: surveillance of the decision-making process also affects an e-merchant’s bottom line.
