Investigating the Relationship between Internet Privacy Concerns and Online Purchase Behavior

Many organizations now emphasize the use of technology that can help them get closer to consumers and build ongoing relationships with them. The ability to compile consumer data profiles has been made even easier with Internet technology. However, it is often assumed that consumers like to believe they can trust a company with their personal details. Lack of trust may cause consumers to have privacy concerns. Addressing such privacy concerns may therefore be crucial to creating stable and ultimately profitable customer relationships. Three specific privacy concerns that have been frequently identified as being of importance to consumers include unauthorized secondary use of data, invasion of privacy, and errors. Results of a survey study indicate that both errors and invasion of privacy have a significant inverse relationship with online purchase behavior. Unauthorized use of secondary data appears to have little impact. Managerial implications include the careful selection of communication channels for maximum impact, the maintenance of discrete “permission-based” contact with consumers, and accurate recording and handling of data.

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