With the pandemic, e-commerce has never played a more critical role. And companies in this thriving sector, led by industry behemoth Amazon (AMZN), are among the most trusted technology players around when it comes to data privacy.
That’s the finding in a poll from Investor’s Business Daily and partner TechnoMetrica Market Intelligence. Not only did Amazon rank highest among e-commerce players, it was the most trusted company around in the survey.
The IBD/TIPP poll surveyed U.S. consumer attitudes toward a list of 24 tech firms chosen by IBD’s editorial team. In the e-commerce category along with Amazon, eBay (EBAY), Etsy (ETSY) and Shopify (SHOP) were ranked. Amazon earned the highest overall score, 69.6 out of the 24 companies surveyed.
“We appreciate the positive response and will continue to think long term and invent on behalf of customers,” Amazon said in an email to IBD about its No. 1 ranking.
Following Amazon was eBay. It received a score of 57.6, or 10th place of all technology companies. Etsy came at No. 12, with a score of 57.1. Only Shopify was in the bottom half, scoring a 52.9 and placing it No. 17.
|HOW E-COMMERCE FIRMS RANKED IN POLL|
|Company||Overall||Age 18-24||Age 25-44||Dem||GOP|
|Source: IBD/TIPP Poll|
Data Privacy And Amazon
TechnoMetrica surveyed 4,029 U.S. adults from April through June. Survey respondents rated their level of trust with major tech companies. The poll focused in on data privacy and protecting users’ personal information.
It also covered a range of industry sectors. This included Apple (AAPL) in consumer electronics, Netflix (NFLX) in internet content, PayPal (PYPL) in financial technology and Facebook (FB) in social media. Amazon prevailed over them all.
Protecting personal information and data privacy is of concern to e-commerce customers. A security breach could lead to the loss of credit card data as well as identity theft.
For the IBD/TIPP survey, TechnoMetrica developed a Trust Index to gauge which tech companies are perceived as the best stewards of people’s data. Above 50 represents a positive level of trust. Under 50 indicates negative trust.
As the Covid-19 pandemic caused numerous disruptions to daily life, consumers sheltered at home and adjusted accordingly. They learned to work remotely while relying heavily on e-commerce for much-needed provisions. E-commerce usage spiked during the pandemic.
“The importance of trust rises during times of turmoil,” Joanna Piacenza, head of industry intelligence at market researcher Morning Consult, told Investor’s Business Daily. “During periods of countrywide anxiety they want to turn to retailers they know and trust.”
What Amazon Does To Gain Trust
The IBD/TIPP survey was broken down into multiple demographics, including age groups and political affiliation.
It showed that Amazon performed especially well with younger people. Amazon had a Trust Index score of 71.5 among respondents ages 18 to 24. It scored a 78 among those ages 25 to 44.
The poll also found a big political divide between Democrats and Republicans. Democrats gave Amazon a Trust Index score of 79.9 vs. 60.2 from Republicans. Similarly, Democrats gave EBay a 67.5, and Republicans gave it a 55.
Amazon managed to lift the trust of the e-commerce sector despite getting lots of criticism for business practices and alleged antitrust behavior. Amazon says it does numerous things to build trust by connecting with consumers.
In July, the company pledged to hire 100,000 veterans and military spouses by 2024. Last year, Amazon launched a massive effort to eliminate counterfeit products from its e-commerce platform.
It also invested more than $700 million and employed more than 10,000 people to protect customers and sellers in its store. Plus, it worked to stop bad actors before they list counterfeit products.
Finally, Amazon has pledged to achieve net zero carbon emissions by 2040 and is making huge investments in electric vehicles.
Data Privacy A Priority At Etsy, EBay
Other e-commerce companies are taking similar measures. Etsy is spending $40 million this year on policy enforcement to ensure the integrity of its marketplace. The company provides e-commerce platforms where creators of arts and crafts, vintage items and other unique goods sell their products.
“Etsy continues to focus on being a brand that inspires trust in our customers across the buyer journey,” Etsy Chief Financial Officer Rachel Glaser said in an email.
“Since Etsy sellers have relatively unknown brands and unbranded items, we aim to ensure that the Etsy brand is recognized and valued for providing an excellent end-to-end experience,” she said. The company also has this blog post on its commitment to trust and safety.
EBay, like Amazon, Etsy and Shopify, has also invested heavily in ensuring the integrity of its brand.
“Trust and safety are a top priority at eBay,” a spokesperson said via email. “We are working hard to ensure our customers have a world class experience on our marketplace.”
EBay has programs to report and remove listings of illegal, counterfeit, or unsafe items. It will also guarantee the authenticity of products and provides various other guarantees.
“Our sellers are protected by policies, transaction monitoring and data systems that make eBay a safe and vibrant community,” eBay said.
Personal Information, Data Privacy In E-Commerce
A separate survey of 4,400 U.S. adults by Morning Consult measured how retailers can grow consumer trust, particularly with online shopping. It found trust was vital and will remain so for retailers wanting to read the changing attitudes of pandemic-weary consumers.
The good news for e-commerce companies is that trust levels have remained steady. Companies have balanced the challenge of low supply and high demand, the survey said.
In another poll in which 25,000 consumers were questioned by Accenture, more than 50% said that the pandemic caused them to re-evaluate what’s important in life. Some are also changing buying habits.
“That creates enormous opportunities for companies that respond by resetting strategies and standards for meeting and exceeding expectations,” the report said.
It also said consumers are re-evaluating priorities, seeking to influence their communities and the environment. This includes a greater willingness to switch brands.
U.K.-based Brightpearl, a provider of retail management software, recently surveyed more than over 2,000 U.S. consumers. It sought to understand better their priorities and concerns as the pandemic evolved.
“We have found that in a post-pandemic world, trust is the new consumer currency,” Brightpearl Chief Executive Derek O’Carroll wrote in a blog post.
Strong Desire For Brand Trust
Yet another survey, the 2021 Edelman Trust Barometer report, it also uncovered a strong desire for brand trust. After surveying 14,000 consumers in 14 countries. Edelman concluded, “Trust is the new brand equity.”
Consumers were asked what was critical or important to them when deciding which brands to buy or use. They said good value for the money and quality were the top two. The third most important element was trust. Feelings of trust rated even higher than a consumer’s love for a product.
Almost 90% said they expect brands to take actions beyond their product and business. This could include being environmentally friendly, donating to good causes, addressing societal challenges, and supporting local communities.
“Generation Z and Millennials are more conscious about the political and social stance of companies, but the general population not so much,” said Morning Consult’s Piacenza. “They are paying more attention about what companies say or do in regards to issues such as climate change, and they don’t want brands to be mum on issues.”
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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