Can Consumers Have The Cookie and Eat It Too? - How consumers navigate the trade-offs between personalization and privacy, and the role of brand trust

Abstract

In the digital world of today, companies continuously hunt for data to personalize recommendations. The question is whether this comes at the cost of the consumer's data privacy, where this study explores how consumers perceive and navigate these issues. Building on three paradoxes identified in previous research on privacy and personalization, this study combined and extends the research on privacy and personalization and the role of brand trust, asking: How do consumers navigate the trade-offs between personalized recommendations and privacy concerns, and what role does brand trust play? This study used a qualitative research approach and conducted 16 semi-structured interviews. By doing this, a better understanding of consumers' trade-offs between privacy and personalized recommendations, and the role of brand trust, was obtained. The findings showed the importance of brand trust as it had a double-sided effect on privacy concerns, having the potential to enhance personalized marketing efforts while potentially being eroded if consumer privacy is mismanaged. The findings contribute to existing research by showing examples of consumers’ reasoning in, and how they navigate the paradoxes. By building and maintaining brand trust, our findings suggest that there are possibilities for companies to continue collecting consumer data to personalize the online experience and maximize business goals.