The impact of identity theft and a fear of online shopping caused retailers to miss out on $21 billion in online sales in 2008, according to study released March 17 by Javelin Strategy and Research and cosponsored by eBillme and First Data.
The study found that 12% of fraud victims report they no longer shop online, while 25% said that the frequency of their online purchases has decreased, and 19% say they now spend less money when shopping online.
But security is not the only issue e-tailers face: The survey also shows that less than half of online shoppers (45%) are satisfied with their purchases when it comes to on-time arrivals and quality expectations.
Specifically, 28% of shoppers found their purchases did not meet their quality expectations and 37% stated their items arrived later than expected. The dissatisfaction was highest among 18-34 year olds.
Of the consumers surveyed, 39% believe that online stores will sell their information and 50% believe that they will receive junk mail and spam if they shop online. To address these concerns, retailers need to clearly communicate their data privacy policies.
The survey also suggests that consumer fear will hurt smaller online merchants: Forty percent of online identity theft victims now only purchase from well known sites such as Amazon.com. By highlighting security and customer service commitments, smaller retailers can counteract this trend.
What would help? According to the survey results, the top five motivating factors that would convince consumers to shop more frequently are:
- Assurance that information is being processed securely (83%)
- Offering zero liability against identity theft (81%)
- Stronger security at the store website (80%)
- A guarantee that the purchase will match quality expectations (80%)
- A guarantee for the best price online (79%)