The Ethical Commerce Alliance (ECA) has released the second edition of the Retail Trust Index (RTI) to examine retailers’ online data practices and highlight the trust gap prevalent in the retail industry.
The research conducted as part of the RTI shows that 80 per cent of consumers are now aware that online retailers track and use their online browsing history, a significant increase of 20 per cent since 2022. The research also shows that around 7 in 10 (74 per cent) consumers are actively changing their online shopping habits to avoid online tracking, with around a quarter (24 per cent) turning to competitor brands.
Re-affirming concerns, 38 per cent of consumers stated that retail brands aren’t doing enough to protect their online data and privacy. In addition, 61 per cent of consumers state online retail brands don’t effectively communicate their tracking practices and use of cookies – an industry-wide misstep when clear data privacy policies are the most important factor in building online trust for almost half of consumers (48 per cent).
The second year of the RTI saw the ECA collaborate with its founding partner Empathy.co to expand its analysis and research by developing a definitive trust score from 0-100, ranking the Top 50 retailers in the UK based on their data practices. Last year’s RTI, conducted by Empathy.co, looked at online tracking practices but this year the analysis went further to look at four key components: Privacy (50 per cent), Security (20 per cent), Shopper perception (20 per cent) and Accessibility (10 per cent). Each component was weighted depending on the impact it had on consumers’ data.
The 5 highest ranked retailers in the UK based on RTI trust scores:
- B&M – 84.76
- Lidl – 83.58
- Boots – 83.42
- Smyths – 81.81
- Waterstones – 81.54
Retail brands such as B&M (1st), Lidl (2nd) and Boost (3rd) found themselves atop of the rankings this year as they were found to have a good balance of moderate cookie usage, digestible privacy policies and strong perceived trust from consumers.
The 5 lowest ranked retailers in the UK based on RTI trust scores:
- Card Factory – 30.42
- WH Smith – 31.44
- The Works – 34.05
- PC World – 36.02
- Iceland – 39.07
In the past 12 months three leading UK retailers – WHSmith, Costco, and The Works – all suffered severe data breaches, exposing thousands of consumers’ personal information and showing that consumers are increasingly aware of data security. So it’s not surprising to see them all towards the bottom of the table. With the ICO reporting that the retail sector has the third highest rate of data breaches, it’s also no surprise that 75 per cent of consumers say they avoid shopping with a retail brand that has suffered a data breach.
Nina Müller, Director of the Ethical Commerce Alliance commented on the findings: “Retailers can no longer ignore the importance of privacy in their digital operations. With regulatory bodies like the ICO and the European Court of Justice looking to uphold the ethical standards laid out by GDPR as they’ve done with Big Tech, retailers have to put customers first. They need to earn their trust, ensuring that ownership, respect and transparency are at the heart of their operations.”
Angel Maldonado, CEO and founder of Empathy.co added: “This year’s Retail Trust Index signals that change is already here. Tides are turning with retailers like B&M and Lidl leading the industry shift towards trust and transparency. With retailers now investing in privacy, it’s clear that the industry is understanding the value of putting people over profits. The rest of the industry must learn from those respecting consumers, as privacy has now become the currency for success. If retailers don’t respect something as common as privacy they risk losing them to rivals. After all, common sense always prevails in the end.”
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