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Thursday
- October 12, 2000
Privacy Policy Satisfaction Breeds Shopping
Comfort Online
With only six weeks to go before the start of the holiday
rush, one of the biggest obstacles facing online toy sales
this season may be retailers' privacy policies. According
to Forrester Research, Inc. and Vividence Corporation, the
leading authority in Web Experience Evaluation, these policies
are important, as they impact toy shoppers' attitudes toward
purchasing on the Web.
"Retailers may not be aware of how important
the privacy issue is to consumers and how it can negatively
affect their bottom line," said Christopher M. Kelley,
an analyst at Forrester Research. "We asked consumers
to speak out about their experiences with several toy-selling
sites. When we compared shoppers' concerns with their behavior
on the sites, we found that the more satisfied Web buyers
are with a site's privacy policy, the more comfortable they
will be when they shop at that site. This comfort level is
a key ingredient to maintaining long-term online retail relationships
-- but if a company misuses this personal information even
once, it can kill that customer bond in a heartbeat."
"Each feature or policy a site posts impacts
the people who visit that site," said Artie Wu, Vividence
CEO. "As soon as a policy appears online, it becomes
part of the customer's experience. Companies that invest
upfront in evaluating customer experience on their sites
benefit by making more informed, targeted decisions about
site content. Forrester demonstrated the value of this type
of evaluation with its research on toy sites' privacy policies."
For the Forrester Brief "Web Buyers Speak
Out About Privacy Policies," Forrester collaborated
with Vividence to conduct a Web Experience Evaluation that
gauged consumers' attitudes toward online privacy and tracked
their behavior on eight different toy sites. A sample of
400 Web buyers from the Vividence Tester Community evaluated
the privacy policies of Amazon.com, Barbie.com, eToys.com,
Fisher-Price.com, JCPenney.com, KBkids.com, Toysrus.com,
and Wal-Mart.com.
On each site, Vividence testers were asked
to find and read the privacy policy. Then they rated each
site's policy in the following three areas: 1) ease of locating
the policy; 2) overall satisfaction with the policy; and
3) comfort level in shopping at the site after reading the
policy. A privacy index ranging from 0 to 100 was created
for each measure, with 100 being the highest score possible.
Across all three dimensions, KBkids.com and eToys.com finished
in the top two slots. However, five of the remaining eight
sites received mediocre scores between 60 and 76, in large
part because they failed to explain the terms and principles
of their privacy policies in an easy-to-understand manner.
The color of one privacy policy's text link blended into
the site's background, making the policy so hard to find
that it earned one site a 39, the lowest score in the index.
This study revealed that while most users were
able to easily locate sites' privacy policies, the policies
themselves fell short of consumers' expectations -- it is
not enough to simply include a legal explanation of consumer
privacy rights. According to Vividence testers, privacy policies
should be written in straightforward English, with clear
explanations about which of the site's affiliates will have
access to consumers' personal information.
Online Used Car Market a Threat to Dealers
The U.S. online used car market is on the brink of explosive
growth. IDC estimates online used car sales' share of all
used car sales will jump from under 3% in 1999 to almost
40% in 2004. However, IDC warns brick-and-mortar car dealers
could put up a roadblock in the market's development.
"For the online used car-buying market
to reach its full potential, online used car firms will need
to work hard to provide an integrated system and a full range
of vehicle-related services, including financing, insurance,
and trade-in services," said Jonathan Gaw, research
manager for IDC's eAuto program. "Because traditional
car dealers make their largest profits from finance and insurance
services, they may withhold inventory if online auto dealers
threaten this part of their business."
If the online used car market can steer around
this obstacle, IDC believes its revenues will accelerate
from less than $10 billion in 1999 to over $164 billion in
2004. "Used cars tend to be high-consideration products
for consumers, and the Internet helps to bring clarity to
the process and transparency to the market, which would lend
greater efficiency to both buyers and sellers," Gaw
said.
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2000 News Archive
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