Online consumers often voice discontent and concern over their privacy and yet fail to take adequate precautions. Nor do they abstain from disclosing information. This study aims to explore this phenomenon which is known as the privacy paradox. Based on semi-structured interviews with online shopping consumers and thematic analysis of data, this paper illuminates the privacy paradox using three themes: psychological distance of privacy, perceived social contracts of privacy, and learned helplessness and privacy empowerment. Our findings contribute to the privacy paradox discourse and provide several implications for consumers, online retailers, and policymakers.

Introduction

The ubiquitous, widespread use of the internet and advent of new technologies continue to be a game-changer for retailing. Especially, ecommerce has emerged as a strong alternate of physical commerce with global e-commerce retail reaching nearly 1.66 billion people in 2017 (Statista, 2018b). In the US alone, e-commerce retail sales reached $336 billion in 2017 (Statista, 2018a). Although the internet has enabled retailers to reach new markets and new consumers, retaining them and earning their long-term trust and loyalty have become a challenge (Fransi and Viadiu, 2007). Especially, safeguarding consumer privacy is a crucial impediment for the growth of e-commerce. Privacy is germane to the flow of information—what, by whom, why, and how information is collected and used (Martin, 2016b). Owing to the seismic shift in the collection, storage, mining, and commoditization of consumer data, concerns over online privacy have multiplied (Arli et al., 2018; Martin and Murphy, 2017; Petrescu and Krishen, 2018). Use of rich and robust consumer digital profiles has enabled companies to predict consumer behavior and provide highly personalized and customized services and thereby generate new business value (Holtrop et al., 2017; Petrescu and Krishen, 2018). However, there is a fine line between data-driven marketing efforts (e.g., targeted advertising, data mining) and protection of consumer privacy (Arli et al., 2018; Holtrop et al., 2017; Schneider et al., 2017). So in order to establish a consumer-friendly digital marketplace, it is essential that we understand privacy dynamics including consumer privacy perceptions and their behaviors.