Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications
    • Cybersecurity

    Gartner: $2 Billion in E-Commerce Sales Lost Because of Security Fears

    By
    Evan Schuman
    -
    November 27, 2006
    Share
    Facebook
    Twitter
    Linkedin

      In 2006 alone, retailers lost almost $2 billion because of consumer security fears, with about one-half of those losses ($913 million) coming from people who avoided sites that seemed to be less secure and the rest (about $1 billion) came from consumers who were too afraid to conduct e-commerce business at all, according to a Gartner survey of 5,000 U.S. adults in August that the research firm will publish on Nov. 27.

      The report is startling in the sense that it confirms what many retailers have long feared. Its a frustrating problem because so many legitimate security defenses are invisible and the most visible security features—such as displaying a sign noting security standards compliance—do little to truly secure the site. Also, credit card purchases are overwhelmingly protected against theft, so the true risk for consumers is quite small.

      Consumers, however, do not make purchase decisions based on reality nearly as often as they do on perception, so the reality of low risk doesnt help much if consumers perceive high risk. Recent reports of payment problems at retail chains certainly doesnt help.

      On the other hand, a consumer survey may not be the most reliable means of measuring e-commerce losses, which, at best, are theoretical as its impossible to precisely quantify the value of purchases never made.

      Also, consumers who want Web sites to improve security might tell survey researchers that the lack of security has stopped them from making purchases, even if thats not true. Even if consumers are speaking truthfully, they are speaking generically about unspecified future purchases. When it comes to actually making a specific purchase, a consumer might very well change his or her mind.

      “For 90 percent of people, if they want that refrigerator, they are going to buy it,” said Avivah Litan, a Gartner analyst specializing in security who is also an author of the report.

      All those things aside, Litan stresses that the security perception issues are real and that e-commerce merchants would do well to improve the actual security as well as improve visible signs of security both for deterrence and to provide customer comfort.

      “The two goals dont necessarily call for the same technical approaches because the most effective fraud prevention applications are often invisible to consumers and criminals,” Litan said. “A layered approach to solving security problems is the most effective. Companies should implement back-end fraud detection, stronger user authentication [beyond single-factor passwords], transaction verification for high-risk transactions and data masking/truncation of sensitive data that is shown on Web-based screens.”

      Gartner is reporting that the impact of the consumer fears extends beyond consumers choosing to make online purchases, but also to online banking—where the report projects that some 33 million U.S. adults have avoided online banking due to security concerns—and generic e-mail marketing. More than 85 percent of the consumers in the Gartner survey said they delete unexpected e-mail without opening it.

      Retail Center Editor Evan Schuman can be reached at [email protected].

      Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

      Evan Schuman
      Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at [email protected]

      MOST POPULAR ARTICLES

      Android

      Samsung Galaxy XCover Pro: Durability for Tough...

      Chris Preimesberger - December 5, 2020 0
      Have you ever dropped your phone, winced and felt the pain as it hit the sidewalk? Either the screen splintered like a windshield being...
      Read more
      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      Why Data Security Will Face Even Harsher...

      Chris Preimesberger - December 1, 2020 0
      Who would know more about details of the hacking process than an actual former career hacker? And who wants to understand all they can...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×