How Data Security Is Affecting Consumerism

With all the data breaches in 2014, consumer’s trust has dwindled. This lack of trust in a company’s ability to secure consumer’s personal information is a great opportunity for companies. Although companies may look at data protection and encryption as necessary for financial transactions online, many companies are missing out on the benefits of data security as a marketing edge, and in turn these companies are losing customers. By understanding the importance of data security to consumers, online retailers can gain their consumers’ trust while improving the company’s own data security practices.

Consumers Are Aware of Data Breaches

Big data breaches are highly publicized, especially when the company is well-known (Target, Home Depot, Sony). Not all consumers are aware of the statistics, but they are becoming more cautious of which online retailers to purchase from.

Consumer’s awareness of data breaches and data security is best shown in a recent study by Deloitte University Press. The study shows that 83% of consumers rated themselves as “extremely to moderately” aware of recent data breaches. The fear of having their personal information, including credit card information, stolen is so high that 59% of consumers would not likely buy from a company that has suffered a data breach.

Importance of Data Security

In the study, 50% of consumers stated that data security is a major factor when they choose who to shop from online. In fact, 80% of consumers said they would be more likely to shop from an online retailer they feel would better safeguard their personal information and 70% of consumers stated they would not buy from online retailers they feel wouldn’t safeguard their personal information. Although these statistics show how important data security is to consumers, only 37% of consumers felt that their personal data was sufficiently protected.

Companies looking to build consumer trust concerning security issues can benefit from these simple fixes:

1. Build a Reputation

Consumer Concern

Consumers want to feel safe, that’s obvious, but with data breaches flooding the media they are going to be more hesitant in purchasing online from just any website. In the study, only 28% of consumers believe they know which retailers do a better job at protecting their information; 72% had no idea which companies to trust with their information.

 Company Fix

The study reported that 70% of consumers stated they are more likely to trust and buy from an online retailer that has been verified by a third-party to have “the highest standards of data privacy and security”.

Companies can gain consumer trust by using an EV SSL Certificate from a reputable Certificate Authority (CA), such as DigiCert. The validation process is more in depth for an EV Certificate than it is for an OV Certificate. Using an EV Certificate will gain that third-party verification consumers are looking for, but it also gives companies two more ways to gain consumer’s trust: the green address bar and website seals. The green address bar and website seals give consumers a clear, visual indicator that the website has been verified by a third-party and is secure. Displaying website seals prominently on a site’s homepage—and especially on payment pages—will give consumers the assurance they need to feel their data is safe.

2. Make Your Privacy Policy Accessible

Consumer Concern

Many people would be surprised to learn that consumers actually do read through privacy policies. According to the study, 73% of consumers stated they skim through them and 13% thoroughly read the entire privacy policy. They want to know how their information is being protected and used. If a policy is hard to understand, is difficult to locate, is in small print, or uses a lot of jargon, it will turn consumers away from a purchase. Almost two-out-of-five consumers said they abandoned a purchase because of a company’s privacy policy.

Company Fix

This fix is easy. Put the privacy policy in a place where people can read it, and then make it easy-to-read by using clear, understandable language. If a privacy policy is hard to find, a consumer might be driven off by frustration or they might be afraid the company is deliberately trying to hide something in the policy.

3. Address Data Breaches Quickly

Consumer Concern

Lastly, data breaches do happen. In 2014, 43% of companies suffered a data breach which was 10% more than in 2013. Most consumers realize that breaches are not going away any time soon.

Company Fix

In the case that one happens, 51% of consumers did say they would be more forgiving of a company that had suffered a breach if the company took immediate action in informing consumers of the breach. No company wants to have a data breach, but having a response plan if it happens can alleviate a lot of the pain. Apart from having a response plan, companies should constantly seek to improve their data security. Keeping consumer’s data should be at the top of any company’s priorities.

Posted in Data Security, Privacy, Security, Uncategorized