Data breaches have a strong negative impact on consumer behavior.
A new survey reinforces the importance of data security to retailers.
According to a new survey of 1,000 U.S. consumers from API and application protection platform ThreatX, 60% of respondents are less likely to work with a retailer or brand that has suffered a data breach.
In addition, only 10% of respondents reported feeling protected by retailers and brands, and almost half (48%) said their personal data has been left vulnerable following a data breach due to an organization’s lack of protection. Nine in 10 of those respondents agreed they are concerned this lack of protection will negatively impact their lives.
Four in 10 respondents ranked financial burden as a top concern for them following a data breach, so it’s not too surprising that 21% said they would switch to a competing brand in the wake of a breach. And 60% said they would consider paying premiums to ensure retailers and brands are adequately protecting their personal information, with almost half (48%) of respondents confirming their data has been exposed in a breach.
Additional findings from the report reveal:
- More than half of millennial and Gen Z respondents said they are very likely to switch to a competing vendor following a cyberattack or data breach, compared to only 38% of boomers and Gen X respondents. Millennial and Gen Z respondents are twice as willing (58%) to pay a premium for better security than boomers and Gen Xers (29%).
- When asked to rank what they valued most from brands, 30% of respondents said transparent communication around a vendor’s security practice, followed by the measures taken in response to a data breach (20%), and a vendor’s action plan to previous data breaches (18%).
“Consumer connectivity and overall engagement is powered by APIs and applications on a daily—if not hourly—basis. And today, some of the most significant data breaches organizations suffer are due to vulnerable APIs and applications which expose sensitive information,” said Gene Fay, CEO of ThreatX. “Consumers are more vigilant than ever about protecting their data and they’re now demanding more from the vendors they work with.”
Study: Total e-commerce fraud in 2023 will exceed $200 billion
According to the “State of Fraud 2023” study from fraud prevention solution provider Signifyd, the total cost of e-commerce fraud in 2023 will reach $206.8 billion. Signifyd estimates that every$100 in fraudulent e-commerce orders results in $207 in tangible losses for online retailers.
According to Signifyd, this excess loss occurs because beyond the value of the goods shipped, there are fulfillment costs, operational costs, the marketing costs of acquiring the customer, the processing cost to execute the sale, and the added chargeback fee.