Online Shoppers Growing Wary Of Sharing Data

Spooked by a steady stream of data breaches and reports of identify theft, consumers are increasingly unwilling to share personal information with Web sites, according to survey of nearly 1,000 consumers conducted by personalization software vendor ChoiceStream Inc. Reflecting their conflicted feelings, the findings indicate that while 80% of consumers want personalized online experiences, 63% are concerned that the personal data they provide may not be secure.

ChoiceStream's survey of 923 consumers, conducted using MarketTools Inc.'s Zoomerang online survey tool, found that 46% of respondents are willing to provide demographic information to get personalized content, down from 57% a year earlier, while 59% of respondents are willing to provide personal preferences, down from 65% last year.

The reluctance to provide personal preferences and demographic information runs contradictory to continued growth in consumers' use of the Internet. Broadband penetration has reached more than half of U.S. households, causing Internet users to spend more time online and seek out more data-intensive content, a technological inflection point that was expected to open up Web commerce opportunities that were elusive in a dial-up world.

But the string of high-profile data breaches that have affected millions of banking and retail customers, and more recently college students, appears to have given consumers jitters. Only time will tell whether the conviction last week of notorious spammer Scott Levine on 120 counts of theft by computer will embolden consumers or simply remind them how their vulnerable their data is. Levine, former CEO of defunct bulk E-mailer Snipermail, was found guilty of stealing 1.5 billion consumer files from a database run by Acxiom Corp. between April 2002 and August 2003 in order to inflate the value of his company.

On a related front, the ChoiceStream findings also indicate that poor visibility into inventory is hampering online retailers. More than a third of respondents said they'd have bought more DVDs and CDs during their last online shopping forays if they'd been able to find more of what they were looking for.