Data Security Breaches and Hacks Are Making a Lasting Impact on Retailers

information security policy, fraud with credit cards

From data security breaches at The Home Depot, TJX, and Target to the hack of over a million images on SnapChat, to the famous, or infamous, cheating website Ashley Madison—almost every industry has been targeted for information theft, from retail and insurance to entertainment and government. Everyone is a target, and there appears to be no end in the foreseeable future.

It would be logical to assume that since technology continues to evolve, data security would also evolve, but that doesn’t seem to be the case. Massive data breaches and security hacks continue to dominate the news, and this negative publicity has been scaring customers away from e-commerce in all its related forms.

The fine folks at Retail Perceptions have recently published a detailed survey that revealed some interesting consumer behavior.

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The Spread of Data Security Breaches:

  • 64% of shoppers have accepted data security breaches to be part of the shopping process and 53% say that data security breaches are a risk they’re willing to take in exchange for convenience
  • 43% of shoppers don’t trust companies to keep their personal information safe. Of these, 30% don’t think companies invest in enough security measures
  • 85% of shoppers are aware of companies that have had a security breach where customers’ personal financial information was exposed

Changes in Spending Habits Due to Data Security Breaches:

  • 39% spend less per shopping trip than before
  • 69% try to use cash instead of credit or debit cards
  • 60% shop online with one specific card designated to online purchases so that they can monitor its activity

Chip Card Technology:

  • 62% of shoppers have used credit and/or debit cards with chip technology to make purchases, and of these 71% say that using credit card with chip technology makes them feel more secure when shopping
  • 60% prefer to use a card enabled with chip technology over any other method of payment
  • 26% say that they do not like using a credit card with chip technology because it takes too long

Shoppers Say That Retailers Could Rebuild Trust By:

  • 80% Being honest about the incident
  • 73% Communicating with shoppers and responding to questions
  • 72% Taking financial accountability for their mistake
  • 69% Investing in additional preventative security measures
  • 6% Firing their CEO
  • 6% Firing the head of the IT department

(You gotta love the 6% of people who want to hold someone accountable!)

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