Consumer Shopping Behavior: Expectations and General Security Concerns This Holiday Season
It’s no secret that Black Friday has signaled the beginning of the holiday shopping season for many years now. In 2014 and 2015, Black Friday and Cyber Monday proved to be seminal events for U.S. retailers. Sales records were smashed — and websites crashed — as frenzied shoppers snapped up deals and promotions.
Will the 2016 holiday shopping season be the same? To learn the answer, Computop conducted research with more than 1,000 consumers in the U.S. to gain a better understanding of their expected shopping behaviors in the run up to Christmas, particularly with regards to online shopping. We also took a look at consumers’ security concerns when shopping online — and uncovered critical insights for retailers.
The following are some key findings from the study:
Consumers’ Shopping Plans
An overwhelming majority of respondents (81 percent) said they planned to shop online this holiday season, with 52 percent saying they plan to spend the same amount online as last year, and 24 percent planning to spend more. Interesting to note, however, is that for Cyber Monday, only 50 percent of respondents said they plan to shop online, with the other 50 percent noting they wouldn’t, as they don’t think Cyber Monday features the deals it used to.
When asked about their interest in purchasing products online from retailers outside of the U.S. this holiday season, 54 percent of respondents said they weren't interested because they have enough options domestically. An additional 20 percent expressed concern about the security of their payment data outside of the U.S.
While these findings should ease U.S. retailers’ minds if they had concerns about consumers shopping this holiday season, or about them looking for deals beyond our borders, the research also uncovered some interesting insights about consumers’ general security concerns when shopping online which should give retailers additional food for thought.
When consumers were asked if they were concerned about security when disclosing their credit card and bank information online, 79 percent of respondents overall agreed with this statement, with 51 percent of those strongly agreeing. When shopping online, 73 percent of respondents confirmed that they check if the site has certificates like eTrust and SSL Certificate from Verisign, with 45 percent strongly agreeing that they do this.
Furthermore, when it came to shopping with retailers that had recently experienced a data breach, 58 percent agreed that they wouldn't shop with them, with a third stating that they strongly agree that they would avoid that retailer.
Interestingly, even though consumers have these security concerns, they don’t necessarily want to change their behaviors to protect themselves. For instance, when shopping online, consumers can opt to use retailers that offer in-store payments so they don’t have to disclose their financial information. Despite this, 43 percent of respondents indicated that they prefer not to. In addition, when respondents were asked if they prefer to browse online and purchase in-store, again avoiding the need to submit financial details online, 36 percent didn't agree with doing this.
When it comes to some of the newer online security authentication features, consumers were hesitant. When asked which of these kinds of features respondents would consider setting up for online purchases in the next 12 months, 37 percent said they would set up fingerprint IDs, 9 percent selected retina scans, 7 percent chose voice recognition and 3 percent noted pay-by-selfie; 41 percent of the respondents said they wouldn’t choose any of the above.
In fact, 25 percent of respondents are concerned that their biometric data could be spoofed, and 11 percent don't trust biometric data for payment authentication. Just 18 percent of consumers surveyed felt that the benefits far outweigh the security risks when it comes to sharing their biometric data for payment authentication.
The research highlights that while convenience continues to drive online shopping behaviors, buying patterns are evolving as increasingly savvy cyber shoppers become more discerning — and cynical — about the marketing hype surrounding Cyber Weekend offers. For future holiday shopping seasons, retailers should consider how they can continue to find ways to differentiate themselves and incentivize consumers to shop with them as holiday promotions seem to be starting earlier and earlier each year.
Also, given consumers ongoing concerns about the security of their payment information online — but lack of interest in changing their behaviors given the ease of online shopping — retailers need to reassure shoppers that their information is in safe hands. Consumers feel more secure when they see payment authentication and digital certification logos prominently displayed on a retailer’s website. Also, retailers can offer payment options beyond cards, like PayPal or MasterPass wallets.
And while biometric data could well pave the way for a more secure and easier way for consumers to transact online, it needs to be handled correctly. First, banks, payment service and card companies will need watertight methods for storing biometric data securely — and clarify, from a consumer perspective, where liability will fall should things go wrong. These things need to be in place before wide adoption should occur.
Ralf Gladis is the co-founder and CEO of Computop, Inc., a global payment service provider.