Cookies are small text files that are used by websites to analyse their visitors’ internet behaviour. They are used extensively on retail e-commerce sites, as they enable targeted advertising, personalised web pages and most importantly enable the site to manage users’ shopping carts.
Prior to the EU Directive on Privacy and Electronic Communications being introduced last month, all this techno wizardry went on in the background. Now retailers must tell the user that cookies are being used and give them the option to change their settings.
But it seems retailers are not rushing to comply with this new law. New analysis from KPMG has found that 80 percent of major UK organisations are still not compliant with the Directive. This is despite the fact that there are heavy fines of up to £500,000 for non-compliance.
In the analysis of 55 UK websites, which was carried out after the introduction of the Directive, KPMG found that only 10 have now implemented measures regarded as compliant with the law. Compared to KPMG’s first analysis of the same websites back in March, when just one company complied, this is not as large an increase as would be expected given the passing of 26 May deadline and the risk of fines. The majority of these 10 websites also only follow the approach of “implied consent” which assumes that users accept the use of cookies unless they change their browsers’ settings.
There is a great deal of confusion around what is actually required to comply with the law. However, adopting a straightforward approach towards these requirements is the place to start; informing customers upfront when you are collecting and analysing information about them builds trust and confidence in your organisation as a whole. Retailers should therefore consider their situation and make sure their full web as well as mobile presence is in line with the law. The time to act is now, as there have been many complaints to regulators from customers unhappy about their rights not being respected.
While it is a legal requirement to add this information into your website, retailers should be going one step further and seeing this as an opportunity to engage and explain to customers why it benefits them to allow cookies. After all, the use of cookies can enable a highly targeted, and far more relevant, online experience. Most users will not want to sacrifice these increasingly personalised web experiences, but it is their choice to make and retailers must respect this.
