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Sloan Management Review

Why personalization matters for consumer privacy

A recent survey shows that personalized benefits can help address consumer data-privacy concerns.

User data provides companies with rich opportunities for creating personalized experiences and tailoring services to customer needs. At the same time, recent high-profile abuses of consumer data have raised concerns over how companies can strike the right balance between personalization and privacy. To help inform decision making, we recently ran a survey asking people about their views on the benefits of personalization, brand tracking of their activities, and the trade-offs between the two. The survey included 1,012 US consumers between the ages of 18 and 70 who had purchased online in the previous six months.

Across the board, people are concerned about brands tracking their activity, but the level of concern varies across activity type. Some 40 percent indicate they are not as concerned about their content consumption, purchases, online searches, and even opt-in wristband (such as FitBits) usage being tracked and captured. The use of machine learning and advanced analytics capable of “hacking the consumer” by tracking digital-content consumption and search behavior doesn’t seem to lead to increased anxiety.

The level of concern rises, however, with activities that are often considered more intrusive. These include algorithms with full-text access emails, using facial recognition in physical stores, and voice recognition devices “listening in” while connected in homes.

To read the full article, go to Sloan Management Review.

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