Over the last few months several retailers were affected by breaches to computer systems that have sensitive personal information of their customers, including credit or debit card numbers, addresses or more. In the months since then retail sales have been affected.
The data breaches have caused US consumers to alter their buying behaviors. A company called Feedzai conducted a study called “2014 Reaction to Financial Data Breaches Study.” It found that 40 percent of Americans now use cash instead of credit cards due to data breach problems over the last few months. The study also showed that consumers blame the retailers for lax security. Consumers who don’t trust retailers won’t shop there. Here’s the proof of that lack or trust effecting sales: 28% of the study respondents stopped shopping in the stores affected by the data breaches.
One thing that the study also showed was that despite those data breaches, 52% of study respondents still think that shopping in brick and mortar stores is safer than shopping online. You would think that the data breaches would show otherwise!
All that said, a CyberSource report stated that despite the online fraud, retail losses decreased 0.9% in 2013. Given the short memories of most Americans, it is hard to say that the data breaches of December through February will have a negative long term effect on retail sales. Many people believed that online shopping was too dangerous. Today more people shop online than ever. Since most of the retailers affected have taken steps to make it right with their customers, and shore up the security issues, many consumers will probably stop thinking twice about shopping in those stores.
How retailers bounce back from the rash of data breaches will be the final determination. If retailers as a whole take steps to be sure customer data is safe, retail will bounce back from the past. Trust can be re-earned if the right steps are taken.
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