Organisations that invest in cybersecurity ‘sell more’ – study
Consumers spend more online with retailers that show strong cyber-security and data privacy capabilities, research shows.
Cybersecurity is now an additional source of competitive advantage for all kinds of organisations with retail arms, according to research from Capgemini. A new report from the IT consultancy calls for more retailers to align their cybersecurity strategies with customer expectations to take advantage of this opportunity.
Cybersecurity: The New Source of Competitive Advantage for Retailers suggests that consumers are ‘increasingly aware of security breaches in retail’ and are ‘willing to spend more’ with retailers that trade online and offline with demonstrable cyber-security capabilities. Based on average annual consumer spending, this equates to a potential annual revenue uplift of 5.4%.
The report’s finding have particular resonance to charities that increasingly look to their shop sales and online trading for supportive revenue.
There are over 6,700 charity shops in the UK, representing more than three fifths of the whole shops market. However, profits in the sector have dropped for the second year running, according to the 2017 Charity Shop Survey.
With pressure from funding cuts, income streams from charities’ retail arms (both offline and online) are arguably more important than ever.
However, Research commissioned last year by the Department for Digital, Culture, Media and Sport (DCMS) as part of the National Cyber Security Programme found that charities are increasingly susceptible to indiscriminate cyber-attacks that could harm their ability to trade.
A matter of trust
More than 6,000 consumers and 200 retail executives were interviewed by Capgemini researchers. It found that 77% of consumers now ranked cybersecurity as the third most important factor when choosing retailers, behind product availability and quality, and above traditional factors like pricing and brand value.
Strong cybersecurity measures increase customer satisfaction by 13%; while 40% of consumers claim that they would be willing to increase their online spend by at least 20% more with ‘retailers they trust’.
The report revealed that retailers who can adopt advanced cybersecurity measures could drive a 5.4% uplift in annual revenue. However, the report also identified a disconnect between the assurances consumers want and what retailers are doing: 70% of consumers want to be assured that their financial and personal information is safe – yet only 44% of retailers polled are actively informing them.
Furthermore, retailers are ‘not adequately informing their customers’ of data breaches. Of the survey’s respondents, 40% admitted that they experienced a data breach over the past three years (2015-2017 inclusive), and had customer financial or personal data compromised, yet only 21% of consumers said that they ‘heard their primary retailer’s name mentioned in connection with a publicly-disclosed data breach’.
Cybersecurity: The New Source of Competitive Advantage for Retailers includes practical recommendations based on the findings of the survey to help retailers address the increasing incidents of cyber-attacks, along with the growing customer expectation of greater transparency.