Will consumers have second thoughts about shopping at a retailer this holiday season that has experienced a data breach in the past?
Chances are, they will.
Perhaps because the sheer number of data breaches in recent years have raised consumer awareness about the potential damage from identity theft, Americans are increasingly wary about engaging with retailers that may not have taken steps to ensure that safeguards are in place to protect personal information.
The number of U.S. data breaches tracked through June 30, 2017 hit a half-year record high of 791, according to a recent report by the Identity Theft Resource Center (ITRC). At this pace, the ITRC anticipates that the number of breaches could reach more than 1,500 by the end of the year, which would represent an approximately 37 percent annual increase over 2016, when breaches reached an all-time record high of 1,093.
Given these alarming statistics, it’s no surprise that holiday shoppers are spooked. In fact, according to a recent survey by Generali Global Assistance, many consider data breaches a far greater threat than being pickpocketed, robbed or having their car broken into while shopping.
The survey’s key findings include the following:
- 84 percent of Americans say their willingness to do business with a retailer would be impacted if the retailer experienced a data breach in the past;
- 57 percent of shoppers believe a data breach of an online merchant will pose the greatest threat to their becoming a victim of identity theft/fraud this holiday season; and
- four in 10 say businesses are not doing all they can, while nearly as many (38 percent) are unsure if businesses are doing enough to safeguard their personal information.
While these figures should certainly be a wakeup call for the retail industry, findings from the survey also indicated some good news for businesses that are willing to proactively address identity theft, data breaches and other cyber threats.
Over half of all Americans (55 percent) would have more confidence that businesses are actively working to protect their data and reduce their risk of identity theft/fraud IF these businesses were to offer identity protection services. Similarly, retail businesses that offer identity protection services, or that plan to do so in the future, instill greater confidence in 56 percent of Americans that these businesses can protect their personal data.
According to recent reports, U.S. holiday spending is projected to reach the highest levels since 2005. Therefore, retailers that want to take advantage of increased consumer spending should incorporate identity protection services into their offerings. The time to act is now, as concerns about data breaches have consumers’ attention like never before. In addition to the recent Equifax hack, which may have compromised the personal information of 145.5 million Americans, breaches over the past few years at The Home Depot, Target and other high-profile organizations have put consumers on edge, making them particularly concerned about the security of their personal information.
With all of this information in mind, it's critical that retailers take a closer at how they can protect against data breaches, and commit to using widely available identity protection services, especially if they've experienced a breach in the past.
Paige Schaffer is the president and chief operating officer of Generali Global Assistance's Identity and Digital Protection Services Global Unit.