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Companies use cookies to get you to buy more stuff. Could it have the opposite effect?

A new study shows that monitoring shoppers can negatively impact an e-tailer’s bottom line.

Companies use cookies to get you to buy more stuff. Could it have the opposite effect?
[Source Image: vasabii/iStock]

Turns out that when companies spy on you online, you’re not only creeped out; you’re actually less inclined to buy something, according to a new study.

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The paper, published in the Journal of Consumer Research by Yonat Zwebner, an assistant professor of marketing at the Arison School of Business at the Interdisciplinary Center, a university in Herzliya, Israel, and Rom Y. Schrift, an associate professor of marketing at the Kelley School of Business at Indiana University, reviews the findings of eight studies that concluded that when consumers know they’re being monitored while they decide whether or not to buy something, they really don’t like it. In fact, they hate it so much, they stop trying to figure out what to buy at all, and they either walk away from the point of sale or choose the easiest, default option to buy.

At least one part of the study—the tracking component—has been playing out online for years via sites’ use of cookies, little pieces of data that identify your computer and keep track of your in-browser activity. Sites are generally required to ask for a user’s consent to track cookies; however, what that actually looks like—and whether sites actually do—is a mixed bag. (Only 11% of sites comply with consent notice regulations in the U.K.; the regulations are even more lax in the United States.) Companies do all this to figure out if you’re interested in buying something and to increase sales, but this study suggests the practice could have the opposite effect.

Consumer spending dropped significantly when subjects knew they were being watched, according to the study conducted by Zwebner, which found that 41% of participants walked away without making a purchase, compared with 20% of those who were only watched while making their final choices or weren’t watched at all.

So what should companies do if they want to increase sales but don’t want to scare people off? A company could use pop-up windows or chat boxes to nudge users to ping customer service if they want support, but it shouldn’t offer detailed suggestions that imply it knows exactly what the customers are looking at (“saw you were looking at that green cable knit sweater—it’s out of stock in medium,” for instance). This less Big Brother-y approach encourages the shopper to purchase something without pointing them in a specific direction, according to the study.

Some companies are starting to get it. Firefox blocks cross-tracking third-party cookies by default since they’re so invasive; Google announced it’s introducing a new API called “trust tokens,” which can verify users who click on ads without giving up personal details. So we already know that consumers are fed up with companies that track their every move. If they need another disincentive, this is it—monitoring the decision-making process also affects an e-retailer’s bottom line.

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About the author

Lilly Smith is an associate editor of Co.Design. She was previously the editor of Design Observer, and a contributing writer to AIGA Eye on Design.

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