Post Categories: July 2014

Retail Perceptions: Retail’s Reality—Shopping Behavior After Security Breaches

july2014-retail-imgEvery time you turn around these days, it seems another retailer has been hit by a security breach. And the FBI has warned that the risk of these breaches is only likely to increase as hackers exploit certain vulnerabilities that are common in today’s POS (point-of-sale) software. Certainly retailers can—and do—take steps to protect their consumers’ private data. But what happens when their safeguards fail? The latest Retail Perceptions report from Interactions finds the results can be wide reaching.

Perhaps most surprisingly, whether or not your organization has been directly affected by a data disaster, shoppers now perceive you differently merely by association. Interactions’ survey found that 45 percent of consumers don’t trust retailers to keep their private information safe, regardless of their security history.

If a retailer does have a security breach, trust is further eroded. Nearly half of consumers surveyed said they would shop at a retailer who had experienced a security breach less—or not all—in the future. Twenty-three percent said they wouldn’t feel comfortable shopping at the retailer for at least 3-6 months after the breach.

For consumers who would give compromised retailers another try, an overwhelming majority—79 percent—say they are more likely to use cash over credit going forward. “This poses numerous implications for retailers,” says Giovanni DeMeo, Vice President of Global Marketing & Analytics for Interactions.

“We already know that shoppers who pay in cash tend to spend less than those who use credit. Furthermore, less use of credit reduces the retailer’s abilities to understand the behaviors of those shoppers,” explains DeMeo. “One of the things that is crucial to retailers being able to continue to address the needs and wants of shoppers is getting the data they need to give consumers more tailored information and unique experiences. As a consumer, cash makes you part of the unknown masses. It reduces a retailer’s ability to create a relationship with you.”

The news is not all bad, though. There are things shoppers say retailers can do to regain their trust after a security breach. This includes things like providing clear and honest explanations of what happened and why, and offering additional incentives or discounts to shop there again.

For retailers who haven’t had a security breach yet, DeMeo says the results of this survey can be key to forming a crisis plan. “Retailers can mitigate a breach to some extent by knowing what shoppers’ behavioral reactions are going to be and being prepared to address their issues and concerns right away. They need to be ready not if it happens, but when.”

For the full Retail Perceptions report—and to learn more about the impacts of security breaches on shopper behavior—visit