Wednesday, March 25, 2009

Security Fears Cutting Into E-Commerce Biz

Matt Hines writes on the eWeek "Security Watch" Blog:

Experts have been saying for years that the influx of online malware attacks and related identity theft would eventually have a negative impact on consumers' willingness to shop over the Web, but a new research report issued by Javelin Strategy & Research has actually put some numbers behind the theory.

In fact, according to the Javelin survey of U.S. consumers, e-commerce vendors may have lost as much as $21 billion in online sales during 2008 based primarily on information security concerns. The company interviewed roughly 2,000 people over the phone and online during Dec. 2008 to reach its conclusions.

Unsurprisingly, those individuals who had already been victimized by identity thieves or other cyber-criminals were among the most likely to have abandoned e-commerce sites, with 12 percent of those respondents indicating that they no longer shop online at all, and another 25 percent telling Javelin that they have at least cut back on their purchases. Some 19 percent of the affected respondents said that they spend less money when shopping as a result of their experiences.

Of all those surveyed, 40 percent replied that they will only shop at major brand sites, such as, based on fears of ID theft.

Despite the negative findings, which also included the fact that some 45 percent of e-shoppers were dissatisfied with some element of the online buying experience, the report also concludes that e-commerce companies can incent buyers to view their services more positively if they can assure that personal information is processed safely (83 percent) and offer enhanced security measures (80 percent). Another concept popular with shoppers was the willingness of sites to offer zero liability against ID theft for their customers (81 percent).

More here.


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