Online consumer data privacy: What concerns Australians?

Published on 27/07/2022 by Andrew Blair

Navigating cookie alerts and privacy policy disclaimers has become a habitual practice in today’s online shopping experience. How do Aussie consumers react to these pop-ups requesting to use their personal information, and how do data privacy concerns affect their purchasing decisions? Read the results of our study to find out. 

A consumer checking data privacy options while shopping online

Data privacy remains at the forefront of our virtual world. Yet, are privacy policies sufficiently transparent in the way they handle consumer data in Australia, and how does this affect online shopping habits? Consumers may consent to a company’s website and data policy without knowing what information they are handing over. How concerned are online consumers with how businesses store, manage, and share their data? 

Could a more transparent privacy policy that clearly outlines how and why data is used prove more effective for marketers of small to midsize enterprises (SMEs)? In this first article of a two-part series, Software Advice looks at Australian online consumers’ knowledge of data privacy and willingness to share information. Here, we examine the impact of a company’s data privacy policy on the habits and behaviours of Aussies when shopping online. We surveyed 1,037 Australians who shop online at least once a month. The full survey methodology is at the end of this article. 

What do online consumers know about data privacy? 

Although 60% of survey-takers are mystified about whether Australia has a comprehensive data privacy law, 40% of respondents believe that the onus of protecting data privacy falls on companies. 

As indicated by the Office of the Australian Information Commissioner (OAIC), the privacy rights of Australians are protected by the Privacy Act 1988, which deals with how organisations and agencies must handle personal information. Although most companies with an annual turnover of less than $3 million are not currently covered by the Privacy Act, some small businesses have obligations to comply with the law. In addition, organisations that wish to do business overseas may have to fulfil legal requirements depending on the country. 

How can companies protect consumer privacy?

  • Provide an up-to-date privacy policy: Follow OAIC guidelines and use simple language to explain why you need to collect personal data and how you are going to use, store, and disclose that information. In addition, tell customers how they can access their personal information, ask for a correction, or make a complaint.
  • Carry out a Privacy Impact Assessment (PIA): A PIA can anticipate potential risks in projects that may have high impact on an individual’s privacy, such as implementing a new IT system or database.
  • Keep personal information secure: Ask for consent when collecting sensitive information, such as health-related data, and ensure all personal information that could identify an individual is protected from unauthorised access, modification, or disclosure and also against misuse, interference, and loss. This includes steps to destroy or de-identify personal information when it’s no longer needed. 
  • Have a data breach response plan: In case of a data breach, having a response plan can help you respond quickly and appropriately, which can decrease the impact on affected individuals.

Despite the majority of respondents being unaware of the comprehensiveness of Australia’s data privacy laws, 59% of survey-takers are aware that Australia’s Privacy Act protects consumers’ online privacy rights. However, 51% of respondents only ‘somewhat agree’ that they are confident their personal information is secure when they provide it to an online company. 

What data are online consumers willing to share?

As long as the security of personal data remains a concern for online shoppers, they may be reluctant to share certain information. Online consumers who are uncertain about how their data will be stored, used, and managed may remain sceptical about sharing their personal information.

At what point do online consumers feel uncomfortable regarding their data privacy? When Software Advice asked respondents what online companies do that they feel invades their privacy, popular answers included collecting website cookies, asking for income or financial information, location tracking, and sending spam emails. 

Stacked bar chart displaying information online consumers are unwilling to share

Similarly, our survey results indicated that financial and location data were among the top three information types that online consumers are least willing to share, along with data related to health. Over half of respondents (51%) did not want to share details of their finances, with respondents reporting a similar reluctance to divulge information about their location (48%) and health (46%). 

Companies should take note of this unwillingness when considering if it is necessary to ask for sensitive information. Clarity regarding the use and protection of personal data can help ease customer concerns when asking for information that online consumers may feel uncomfortable sharing. 

Did you know?

Cloud security software helps organisations protect data and applications such as database software in the cloud by providing security threat monitoring, detection, and management capabilities. 

In contrast, respondents had the least reservations about sharing their gender identification, with 92% ‘somewhat’ or ‘very willing’ to provide this information. Similarly, giving demographic information, such as age or occupation, or sharing sentiment, such as leaving a review or rating, wasn’t an issue for most respondents, with the majority at least ‘somewhat willing’ to do this.

Stacked bar chart displaying information online consumers are willing to share.

What are typical consumer habits when shopping online?

There has been a steady growth in Australia’s e-Commerce market in recent years. Understanding the behaviour of online shoppers can help marketers exploit this growth. The use and tracking of cookies can be a way for marketers to leverage online consumer data. 

When an online consumer gives consent, cookies capture their data, sending the collected data to the user’s current browser. These cookies can then be sent back to the server when the user revisits the browser, which displays previously captured user information that can drive targeted advertising or direct marketing toward the consumer. 

A pie chart displaying consumer behaviour towards a cookie authorisation form.

Chrome is the most popular browser amongst 56% of survey-takers, with Safari preferred by 21%, and when presented with a cookie authorisation form, 45% of respondents said they usually accept all cookies. On the contrary, only 10% of the respondents choose to decline all cookies. 

Bar chart displaying consumer cookie clearance frequency. 

Incognito mode can be used to avoid cookies but 47% of respondents said they never used this browser feature when shopping online, although a further 19% of survey-takers knew nothing about it. However, a combined total of 81% of respondents said they clear browser cookies either ‘often’ (30%) or ‘sometimes’ (51%). This suggests concerns around the use of cookies, which as mentioned earlier, some respondents considered to be an invasion of privacy.

The apparently contradictory behaviour of accepting cookies and then deleting them later suggests that these online consumers remain privacy-focused. It may be that the transparency around cookies in the authorisation form is unclear, or that consumers have formed the habit of accepting to continue browsing but then seek privacy control later on.

A similar tendency to accept and continue is seen when it comes to a website’s privacy policy, which only 10% of respondents said they always read before providing information. When it comes to purchasing from a new online retailer, our survey indicated a reluctance to share personal data, with over half (55%) of survey-takers preferring to remain anonymous and check out as a guest. 

What do consumers take into account regarding data privacy? 

So far, our survey results indicate that Aussie online consumers are not entirely knowledgeable of privacy laws and we’ve looked at their privacy practices towards cookies, but what do consumers take into account regarding their privacy preferences? Software Advice looked a little deeper into what online consumers look for regarding data privacy before deciding to do business with a company. 

Single statistic showing 45% of respondents read customer reviews. 

The survey indicates that the majority of online consumers evaluate a company’s data privacy reputation before doing business with them, as 64% of the respondents said they ‘always’ or ‘sometimes’ research this before making a purchase. The methods most used by these survey participants were reading customer reviews (45%) and carefully reviewing company policies (27%).   

Did you know?

Companies can keep on top of what customers are saying about their organisation and products in reviews and elsewhere online by using reputation management software. This can help SMEs evaluate customers’ sentiments regarding their privacy policy and marketing approach.

Of the respondents that indicated they don’t research a company’s data privacy reputation, 72% said that they do, however, factor a company’s data privacy practices into their decision before doing business with a company online. Therefore, although data privacy isn’t at the forefront of their agenda, they remain privacy-focused. 

Company privacy practice is important for online shoppers to continue doing business with that company. Our survey indicated that a combined total of 45% of the respondents have stopped doing business with a company because they disapproved of their data practices: 25% on one occasion and 20% on multiple occasions. 

Spotlight on security and transparency

The overall results of our survey indicate that the actions of privacy-focused consumers speak volumes about how SMEs should highlight their data privacy policies with their intent of data use and security provisions. Although 48% of respondents say they rarely or never seek out specific privacy-focused companies or services, their online habits and willingness to share information suggest that data privacy matters to them.

For SMEs looking to win over the privacy-focused consumer’s trust, ensuring your data security is robust and compliant and communicating that to your customers is critical. Online companies should review their transparency by clearly informing their customers about what data they are collecting and how they use that information to personalise and improve their online experience. 

Consumers who are informed and understand the added value of providing their data are more likely to share useful information, which SMEs can use to make more informed data-driven decisions.

In the next article in this two-part series, we will explore how companies can win over the trust of their privacy-focused customers.

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To collect this data, Software Advice interviewed 1,037 Australians online in June 2022. The candidates had to fulfil the following criteria:

  • Australian resident 
  • Above the age of 18
  • Shop online at least once per month 

NOTE: This document, while intended to inform our clients about the current data privacy and security challenges experienced by companies in the global marketplace, is in no way intended to provide legal advice or to endorse a specific course of action. For advice on your specific situation, consult your legal counsel.

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.