With only six weeks to go before the start of the holiday rush, one of the biggest obstacles facing online toy sales this season may be retailers’ privacy policies. According to Forrester Research, Inc. (Nasdaq: FORR) and Vividence Corporation, the leading authority in Web Experience Evaluation, these policies are important, as they impact toy shoppers’ attitudes toward purchasing on the Web.

“Retailers may not be aware of how important the privacy issue is to consumers and how it can negatively affect their bottom line,” said Christopher M. Kelley, an analyst at Forrester Research. “We asked consumers to speak out about their experiences with several toy-selling sites. When we compared shoppers’ concerns with their behavior on the sites, we found that the more satisfied Web buyers are with a site’s privacy policy, the more comfortable they will be when they shop at that site. This comfort level is a key ingredient to maintaining long-term online retail relationships — but if a company misuses this personal information even once, it can kill that customer bond in a heartbeat.”

“Each feature or policy a site posts impacts the people who visit that site,” said Artie Wu, Vividence CEO. “As soon as a policy appears online, it becomes part of the customer’s experience. Companies that invest upfront in evaluating customer experience on their sites benefit by making more informed, targeted decisions about site content. Forrester demonstrated the value of this type of evaluation with its research on toy sites’ privacy policies.”

For the Forrester Brief “Web Buyers Speak Out About Privacy Policies,” Forrester collaborated with Vividence to conduct a Web Experience Evaluation that gauged consumers’ attitudes toward online privacy and tracked their behavior on eight different toy sites. A sample of 400 Web buyers from the Vividence Tester Community evaluated the privacy policies of Amazon.com, Barbie.com, eToys.com, Fisher-Price.com, JCPenney.com, KBkids.com, Toysrus.com, and Wal-Mart.com.

On each site, Vividence testers were asked to find and read the privacy policy. Then they rated each site’s policy in the following three areas: 1) ease of locating the policy; 2) overall satisfaction with the policy; and 3) comfort level in shopping at the site after reading the policy. A privacy index ranging from 0 to 100 was created for each measure, with 100 being the highest score possible. Across all three dimensions, KBkids.com and eToys.com finished in the top two slots. However, five of the remaining eight sites received mediocre scores between 60 and 76, in large part because they failed to explain the terms and principles of their privacy policies in an easy-to-understand manner. The color of one privacy policy’s text link blended into the site’s background, making the policy so hard to find that it earned one site a 39, the lowest score in the index.

This study revealed that while most users were able to easily locate sites’ privacy policies, the policies themselves fell short of consumers’ expectations — it is not enough to simply include a legal explanation of consumer privacy rights. According to Vividence testers, privacy policies should be written in straightforward English, with clear explanations about which of the site’s affiliates will have access to consumers’ personal information.

About Vividence Corporation
Vividence, the leading authority in Web Experience Evaluation, helps marketers at leading businesses quickly and thoroughly understand the behavior and improve the experience of their customers on the Web. Vividence findings and recommendations enable businesses to increase customer retention, improve marketing strategies and confidently stay ahead of the competition. Vividence is backed by venture capitalists Kleiner Perkins Caufield & Byers, Sequoia Capital and Angel Investors, L.P. Our clients include more than 130 leading businesses such as Cisco Systems, Compaq, Excite@Home, Great Plains, Hewlett-Packard, Lycos, Microsoft, nordstrom.com, Pfizer, and Wells Fargo. To learn more about the Vividence solution, please visit www.vividence.com.