Consumer confidence is shifting from bricks-and-mortar to online retailers

New research shows three-quarters of consumers are less likely to shop with a company that allowed their personal data to be stolen.

Abby Callard

Once upon a time, not that long ago, consumers were nervous about spending money online. But given that U.S. e-commerce spending topped $263 billion in 2013, according to the U. S. Commerce Department, it’s safer to assume many consumers have fewer qualms about entering their credit card information to purchase things online.

In fact, says Craig Borowski, the managing editor at retail software consulting firm Software Advice, consumers now view online transaction as having less risk than in-person transactions at bricks-and-mortar retailers. “All through the 1990s and most of the 2000s online shopping was seen as comparatively risky, from a data security perspective,” he says. “But that's no longer the case. Online security measures have improved tremendously, and consumers are much more savvy when shopping online than they used to be. They know what to look for to shop safely online. Add to that the fact that the hackers have come up with increasingly clever ways to steal data from brick-and-mortar shops and all the high-profile success they've had doing so, and the tables are now turned.”

Borowski is referring to such breaches as the successful attack last year on store networks at Target Corp. that resulted in criminals gaining access to 40 million credit card numbers and the breach at The Neiman Marcus Group Inc. that compromised 1.1 million customer payment cards. Hackers in both of those instances gained access to data about cards used at physical stores, and online customers were not affected.

All of that adds up to many consumers being more worried about their personal information being stolen in person rather than online, Borowski says. “Many consumers are more hesitant to swipe a card in person than online,” he says. “It seems now that the brick-and-mortar stores and traditional point-of-sale software need to catch up to the level of security seen on most online retail sites."

Software Advice recently completed a survey that looked at how consumers’ shopping habits are influenced by the fear of personal data theft. More than three-quarters of consumers would be less likely or completely unwilling to buy products from a company that allowed their personal data to be compromised. 35% of all respondents said they would stop shopping with that company. Only 22% of consumers said their shopping habits at a company would be unaffected if hackers stole their data from that company.

The survey also asked consumers how likely they would be to shop at a store if they felt confident it would keep their data safe. About 33% said they would be much more likely to shop there, 20% said they would be somewhat more likely, 16% said they wouldn’t be more likely and 30% said they weren’t sure.


Data breach, e-commerce, Neiman Marcus, payment security, payments, Security, Software Advice, Target