Security main concern for online shoppers

Australian retailers are not doing enough to make consumers feel secure when shopping online, resulting in lost revenue.

This was one of the findings of a panel of industry experts, who all agreed that retailers are missing out on major online opportunities because of a lack of knowledge and need to be better educated to tap into this demand.

"Australian retailers have been very slow when it comes to delivering compelling online shopping offers," says Mark Dougan, managing director, Frost & Sullivan and panel moderator. "Some large retailers have made false starts while others took a long time to even recognise the internet as a relevant channel for sales.

“While consumer enthusiasm for internet-based retailing remains relatively strong, many highlight privacy and security concerns as key reasons they are not shopping online.”

Research shows 60 per cent of Australians who use the internet also buy goods and services online. However, this has declined from 68 per cent in 2010-11.

"Shoppers remain concerned about the security of their online transactions and their personal details," Dougan says. "This is causing many to shy away from online shopping altogether."

Mark McGeachen, CEO of AdvanceRetail Technology explains that online and in-store security is a massive issue for retailers as about 90 per cent of transactions involve credit or debit cards.

“This means there is a lot of payment and personal customer data that is being collected and stored, and retailers need to be sure this data remains secure,” he says.

“The issue becomes a more complex one when that data is handed over to third-party operators such as companies running loyalty schemes. Some of these work with multiple retailers and are handling vast quantities of personal data. It is difficult for a particular retailer to ensure that their customer's data remains secure.”

Online retail growth is also being slowed down by the poor transactional capabilities of many websites and a lack of efficient back-end integration. While retailers want to offer a seamless experience for shoppers―which is what they are expecting―only a very few succeed.

"Retailers have more insights than ever before into their customers’ tastes, needs, wants and buying habits,” says MuleSoft APAC chief technology officer, Brad Drysdale.

“To take full advantage of all this customer data, they need an effective way to aggregate the information and integrate it with their various systems and operations for all areas of business, including inventory management, product development, advertising, customer relationship marketing and sales. However, we see cases where emails are printed out and re-keyed to achieve so-called 'swivel chair' integration between systems."

However, in-store security should not be overlooked. POS systems have been a major target with skimming practices growing exponentially over the last few years.

"Often, retailers focus their security investments on their core IT systems but don't pay sufficient attention to branches or retail stores where problems can occur," says WatchGuard Technologies ANZ regional director, David Higgins.

Also, there are still plenty of retailers who are not ready or just not willing to adjust to the new digital world―and this sitting back and doing nothing is the biggest danger of all. 

By Marion Gerritsen