Examining the impact of a privacy label on consumer perceived vulnerability and purchase intention towards connected devices

Abstract

Considering the heightened threats posed by unethical methods in companies’ collection and use of consumer data, this research tests the effect of an icon-based privacy label inspired by the Nutri-Score, hereafter referred to as a privacy score, categorising connected devices from most to least privacy-friendly and designed to provide consumers with accessible privacy-related information. Grounded in signalling theory, four experiments were conducted to explore how signals help consumers reduce information asymmetries when purchasing smart speakers. After examining the privacy score comprehensibility (Study 1), Study 2 assesses the impact of its presence (vs absence) and level (green to red), while Studies 3 and 4 consider its interactive effect with brand trust and consumers’ disposition to value privacy. Findings show that a favourable privacy score reduces perceived vulnerability and increases purchase intention, and its effect is brand-dependent (maximised for untrusted brands) and consumer-specific (enhanced when disposition to value privacy is low).