As more consumers give their personal data over to the retailers they buy from, protecting that information is a critical element of maintaining consumer confidence. Unfortunately, a recent report shows that there's a short supply of public faith in retail cybersecurity.
According to Capgemini Consulting's newest report, "Privacy Please: Why Retailers Need to Rethink Personalization," 93 percent of more than 220,000 consumers surveyed expressed serious doubts over retailers' abilities to protect consumer data in the event of a cyberattack. Moreover, the study found that retailers themselves acquired a negative connotation related to data security when engaging in certain activities consumers viewed as overtly negative, namely in-store traffic monitoring (84 percent) and facial recognition (81 percent).
Kees Jacobs, global consumer products and retail consumer engagement lead at Capgemini Group, explained that these figures represent a long and ongoing rude awakening for analog retailers in a digital world.
“The deluge of hacks on retailers’ data and misdirected personalization initiatives are having a dramatic effect on consumers’ trust," Jacobs told Retail Times. "The advent of digital shopping and big data analytics promised a golden age for retailers, but many of the world’s largest brands are finding the reality of safeguarding and properly utilizing this precious information very challenging."
Retailers need to develop adequate data protection policies quickly, because data from Statista shows that cyberattacks on retail aren't slowing down any time soon. Though the six-year average for financial losses from hacks and breaches sits at just $5.5 million annually, fiscal year 2015 has already seen $11.4 million lost to cybercrime.
Dire statistics on both the financial and reputational sides of things point to the fact that retail needs solutions for data security sooner rather than later. Merchants all but require vast amounts of data to turn profits in an increasingly eCommerce-flavored industry with thin margins, and if consumers begin withholding information out of fear for their security, hacks and breaches will be the least of retailers' worries.
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