Retailer performance, store productivity and consumer spending

Do Your Customers Trust You?

Three in 10 shoppers do not trust the retailers they buy from. And who can blame them after all of the data breaches and flagrant violations of personal information larger tech companies and other mega-brands have let slip or knowingly used for experimentation in H1 2014 alone?

Consumers largely remained in the dark or at least blissfully unaware of how much of their information they sign away when they sign up for a social network or purchase an item from a giant retailer. And they would have remained unaware had there not been huge retail data breaches in late 2013 and H1 2014. The once-quiet consumer is now speaking out and fighting back: Facebook users were outraged when they learned that the tech giant experimented on them to see how changes in Facebook feed information affected users’ moods and shoppers learned just how vulnerable personal data can be when companies from eBay to Target forfeited credit card and customer information during major security breaches.

According to eMarketer, eBay, Zappos.com, and Target have let slip information about 239 million customer accounts from 2012 to 2014. Other infamous retail data breaches came from the TJX Companies between 2003 and 2006 and a multicompany breach of 7-Eleven, JCPenney, JetBlue Airways, NASDAQ and WetSeal from 2005 to 2012.

A study from ACI Worldwide and the Aite Group from July 2014 of more than 6,100 consumers across 20 countries revealed that respondents do not trust the retailers from whom they buy. Twenty nine percent of respondents “do not trust retailers (e.g., stores, online shopping sites, restaurants, etc.) to protect stored personal and financial data against hacking attempts and data breaches.” And nearly half of consumers surveyed assume that the security systems where they shop will not adequately protect them and their financial data from reaching invasive and sometimes predatory hackers.

The results from Interactions’ Retail Perceptions July report indicated bleaker safety conditions for consumers. Over 40% of those surveyed said they had their personal information stolen in a security breach; for millennials, who are perpetually plugged in—more than half of 18- to 24-year-olds say they never unplug from technology—and shopping year-round, that number is even higher. Six in 10 millennials have had information stolen.

The problem for retailers is that bad news travels fast. Eighty-five percent of Interactions’ respondents told their friends and families about the experience via social media, in person, and sometimes even on the retailer’s website.

A common refrain says it can take a lifetime to build trust but only a split second to lose it. eMarketer’s Krista Garcia wrote in a June 2014 report that what retailers can do to repair those bonds—if they hope to continue harvesting information from shoppers’ mobile phones and online behaviors—and make shoppers feel at ease is maintain some level of transparency. All shoppers want is to know what their data is being used for and maybe benefit from that exchange of information. They want the relationship to be symbiotic, not parasitic.

0