Throughout the digital era, our society has experienced some of the most fascinating new trends and technologies, many of which include a shift toward the e-commerce world. Our minds have been trained to seek out the most efficient methods of accomplishing a task simply because we yearn for convenience and speed.
In the retail industry, e-commerce has dominated marketplaces over the last decade as it only continues to grow in popularity, despite certain tribulations. It is these tribulations that have loss prevention professionals and researchers on the edge of their seat. We thus take a dive into the minds of the consumer and immoral undoing, alike.
Most retail consumers can recall a moment of hesitation when contemplating an online purchase. Interestingly enough, research shows that consumers are more likely to regulate purchases based on avoidance of negative risks as opposed to stressing positive promotional features of items. This idea is referred to as ‘prevention-focused self-regulation’. In other words, consumers seek out characteristics we don’t like because we are afraid to discover them when the purchase arrives in the mail.
Loss Prevention and asset protection individuals would find most interesting how perceived risk of consumption is packaged in three forms: privacy, product and financial-risk perceptions. While product and financial-risk perceptions are relatively immediate upon purchase of product, it is concern over risk of privacy that continues to grow among shoppers.
Fear over a breach of privacy does not make a significant impact on consumer’s willingness to purchase items at hand. Rather, it is the consumer’s previous shopping experience that greatly impacts the business-to-customer relationship.
The aforementioned business-to-customer relationship brings up a valid point- retailers are certainly concerned with the customer’s perception of risks, but we must also consider the financial impact issues that e-commerce spending may have on businesses as well (shrinkage for example). Not only are consumers being schemed through the blind transactions online, but businesses also experience the perils of illicit deals.
In hopes of combating these hesitations, retail marketers tend to focus on attracting and retaining first-time customers through first-time buyer promotions and customer rewards programs.
Going forward marketers recognize the need to adequately stress the absence of negative, risky features of e-commerce as opposed to the positive qualities that other retailers may also be advertising.
Discovering the formula for customer satisfaction and the assurance of asset/ privacy protection on both sides of the industry is the challenge facing online retailers today. In a sense, businesses must figure out a method for incorporating loss prevention from not only the company’s perspective, but the consumer’s perspective as well.