E-COMMERCE
Security stops e-shoppers
12-07-2004
by Craig Liddell
New research reveals that shoppers would turn their backs on major on-line shopping brands because of security breaches.
Released by international IT services company LogicaCMG, the research reveals that more than one in 20 consumers have experienced an attempted or actual theft of financial or personal details whilst carrying out on-line transactions such as banking and shopping. Over a million UK consumers have been victims of security breaches while shopping on-line, which is prompting them to move away from major stores.
With on-line purchases from British consumers predicted to be STG17 billion (EUR 25.51 billion) this year, and 20 million UK consumers shopping on-line, these findings will make businesses aware of how costly a security failure can be to its brand, according to LogicaCMG.
"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 with 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."
The research reveals that almost a quarter (24 percent) of disgruntled shoppers defected to an alternative on-line brand because of security breaches. Twenty-three percent decided never to buy anything from that company again, and over one in ten (12 per cent) "badmouthed the firm to friends and family," the report said.
Conducted by London-based research company, Tickbox.net, the results are based on permission-based research among approximately 1,700 on-line users.
Shoppers are voting with their feet when it comes to security, according to the survey. Around 70 percent 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 after a security breach, 79 percent of those surveyed claimed they would stop shopping on-line with their most trusted brand and two-thirds (65 percent) said they would completely stop buying from that company -- either on-line or at the brand's high street stores.
"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," LogicaCMG said. "When the value of the largest global brand is currently valued at STG70.4 billion (EUR105.61 billion), the case for creating a secure environment for consumers to shop on the Internet is essential."
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