Study: Consumers Give Up Data In Exchange For Discounts Because They Figure It’s All Out There Anyway

You’re shopping at a store you’ve never been to before. They offer to sign you up for a loyalty card. You know it’s going to create endless postal and electronic spam for you if you accept, but they’ll give you 40% off of this order if you do. So you take the card. The store thinks they just bought your info with a discount. Are they right?

Researchers at the University of Pennsylvania put that thesis to the test. While coupons and discounts are nice, they’re not exactly a major motivator for consumers, researchers found. Or rather they are, but not in the way stores think. Instead, the overriding sentiment from consumers is one of straight-up resignation. As a whole, it seems we are already adapted to our you-are-the-product present and creepingly invasive future.

The logic — consciously or subconsciously — goes something like this: If every marketer and business on earth is going to be able to buy, sell, trade, and access information about you anyway (and they are, with or without your permission), what’s the harm in giving it to them directly instead? At least then it will be right, and you can get something useful, like a discount, in exchange.

That feeling of an utter inability to change anything — the universal ¯\_(ツ)_/¯ — is resignation.

“Resignation occurs when a person believes an undesirable outcome is inevitable and feels powerless to stop it,” Joseph Turow, the study’s lead author, said.

The study asked participants whether they would accept trade-offs, like coupons or discounts, in exchange for allowing supermarkets to collect information about their purchases. Consumers overwhelmingly said that it was not okay:

91 percent disagree (77 percent of them strongly) that “if companies give me a discount, it is a fair exchange for them to collect information about me without my knowing.”
71 percent disagree (53 percent of them strongly) that “it’s fair for an online or physical store to monitor what I’m doing online when I’m there, in exchange for letting me use the store’s wireless Internet, or Wi-Fi, without charge.”
55 percent disagree (38 percent of them strongly) that “it’s okay if a store where I shop uses information it has about me to create a picture of me that improves the services they provide for me.”

Only about four percent of respondents agreed with those three statements.

But despite the majority of consumers feeling it was wrong for retailers to behave in that way, over half feel that retailers already do.

58% of the survey respondents agreed with both of these two statements:

  • “I want to have control over what marketers know about me online”
  • “I’ve come to accept that I have little control over what marketers can learn about me online.”

Agreeing with both at once, the researchers explained, indicates that consumers are basically resigned to their information being out of their control.

“Resigned individuals may behave in ways that allow marketers to claim they are unconcerned or accept the economic logic that insists people trade their data for benefits,” said Turow. “But we found that most Americans reject this logic. In fact, our findings match more than a little anecdotal evidence that people feel they cannot do anything to seriously manage their personal information the way they want.”

But, he added, consumers generally feel the alternatives are worse — there is no real opting out of all commerce and communication. “Moreover,” said Turow, “they feel they would face significant social and economic penalties if they were to opt out of all the services of a modern economy that rely on an exchange of content for data. So they have slid into resignation.”

Last year a performance artist in New York demonstrated much the same principle, getting hundreds of passers-by to provide her with personal information in exchange for cookies. In that instance, 380 attendees of a Brooklyn arts festival provided the artist with personal data ranging from address and phone number to their mother’s maiden names, the last 4 digits of their SSNs, and even, in some cases, their fingerprints.

Penn Study: Americans Give Up Personal Data for Discounts, They Believe Marketers Will Get It Anyway [University of Pennsylvania]