Consumers buying more online, but still concerned about giving out personal info

[September 13th 1999]

While a growing number of consumers are buying products and services online these days, e-shoppers remain concerned about giving out certain types of personal information over the Internet.

"As more and more e-commerce requires background checks, financial or otherwise, consumers are asked to share personal information like Social Security numbers, which they object to highly," said Warren Pino, president of Q&A Research, Inc.

Q&A Research, based in Novato, California, conducted a series of six focus groups in California and Texas on e-commerce for InsureZone.com, a new San Francisco-based insurance Web site that is preparing to open this fall.

"The vast majority of focus group participants indicated that they don't want to give out their Social Security number because they see it as a link to their credit card and bank accounts, among other personal records," Pino said. "It's not so much online vendors that consumers worry about, but a hacker who may intercept personal information."

Participants said that they don't mind sharing their driver's license number or vehicle identification number to get auto insurance quotes, for example, but they believe their Social Security number is asking too much.

"People know that this information is floating out there already, but they figure why make it even easier for someone to get it and misuse it," he said.

InsureZone.com executives said the focus groups confirmed what they had believed to be true: Privacy and security of customer information is paramount in the world of e-commerce. "We believe our customers' private information should remain just that -- private, and consumers have the right to know why we're asking for any type of information," said Peter Henry, President of InsureZone.com.

Henry said InsureZone.com may, in some circumstances, ask for the Social Security numbers of its customers in order to get an insurance policy online, but only when it is required by the carrier for actually providing them with a bindable quote. Moreover, InsureZone.com uses the latest encryption techniques to ensure maximum security of customer information.

Focus group participants said the reputation of online vendors is also a key factor in their e-commerce buying. Is the retailer a name that consumers recognize and trust or is it an unknown brand? This becomes particularly critical in online purchases where consumers can't see, touch and inspect the product. "Consumers want to buy reputable products from reputable sellers; that's an important part of the value they feel they get," said Henry.

Other priorities included responsiveness, quality service -- both when a product is purchased and down the road -- and access to a "real live human " 24 hours a day, seven days a week should they need personal help.

"In these early days of e-commerce, it's critical that Web sites provide personalized attention, day or night, if necessary," Pino said. " Consumers still want and need the security of knowing that they can easily opt out for a live human if they need one." Issues such as security, confidentiality and personal service will play a key role in how much consumers will spend over the Internet in the future, Pino said. How Web sites respond to these issues could separate the winners from the losers in cyberspace.

Despite these concerns, more and more consumers are wading into e-commerce, Q &A found. Participants estimated that their online purchases now account for about 5 percent of their personal expenses. Moreover, consumers expect to increase their Internet spending by 50 percent in the years ahead. Even those who hadn't bought anything online yet said they expected to do so soon, and were bullish about the long-term prospects of e-commerce.

"Consumers appear to be getting used to the concept of buying something over the Internet," Pino said. "They see a number of benefits, including time-saving, flexibility and convenience. They also like the feeling of being in control -- that is, not having to deal with high-pressure sales people trying to close a sale."

Links
InsureZone.com		http://www.insurezone.com