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| Security failures threaten online shopping |
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| Saturday, 10 July 2004 | |
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08 July, 2004: Over a million UK consumers have been victims of security breaches whilst shopping online, which is prompting them to turn their backs on large online brands. New research by LogicaCMG reveals that more than one in 20 consumers have experienced an attempted or actual theft of financial or personal details whilst carrying out online transactions such as banking and shopping. As well as the risk to their finances, this also has an emotional impact, with four in ten (43%) respondents comparing their experience to being robbed, and three in ten (31%) reporting mistrust in the website or company. The research illustrates that businesses need to be aware that if consumers are let down by online security, they're willing to take direct action. Almost a quarter (24%) of disgruntled shoppers defected to an alternative online brand, 23% decided never to buy anything from that company again, and over one in ten (12%) "badmouthed the firm to friends and family." Not surprisingly, security is their most important concern. Nearly three quarters of UK consumers (73%) cite security as more important to them than price, quality or convenience when shopping online. More worryingly for retailers, 70% of consumers would boycott a web site, even if they only had word of mouth evidence that the brand had been involved in a security scare. And it seems that if a customer gets their fingers burnt by an Internet security breach, this can lead to them cutting all ties with a retailer. When consumers were asked if they would continue to buy goods or services in the future, should personal or financial information be stolen after shopping online, 79% of those surveyed claimed they would stop shopping online with their most trusted brand and a staggering two thirds (65%) said they would stop purchasing with that company altogether – either online or at the brand's high street stores. However, some consumers would be less reluctant to bar all online purchases if retailers could ensure that their online sites are safeguarded. One in five claimed they would need to be more convinced by retailers that their financial and personal details are secure. Proving that "the rumour mill" is a powerful tool, one in six consumers said hearing word of mouth through a friend or family member who has purchased online successfully would further encourage them to purchase from that brand. "There are many recorded instances where a new web site has been successfully attacked within 15 minutes of it being first launched", says Dave Martin, principal security consultant, LogicaCMG. "These figures should be a real wake up call for retailers as they demonstrate that consumers will vote with their feet and switch brands if they lose trust. One could argue that retailers should spend just as much, if not more on securing their sites, as they do on making their sites look really cool. There is little point in investing in publicity to drive consumers to insecure web sites which will ultimately damage the brand." With online sales from British consumers predicted to be UK£17bn this year and 20 million UK consumers shopping online, these findings will make businesses aware of how costly a security failure can be to its brand." Consumers are taking direct action and, as the evidence clearly indicates, a security breach can result in real loss of the reputation of a brand as well as the loss of revenue during the time a site is not in use. When the value of the largest global brand is currently valued at UK£70.4bn, the case for creating a secure environment for consumers to shop on the Internet is essential. Soon, more opportunities to purchase goods and services will be available via wireless devices (mobile phones, hand-held computers etc) and almost half of those surveyed (47%) claimed they would feel more concerned about using wireless channels to purchase goods and services than using the Internet. In order to allay these fears, retailers need to put appropriate measures in place before consumers face the same threats through wireless as they've experienced on the Internet. www.logicacmg.com |
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