Consumer Online Shopping Fears

Transcription

1 Consumer Online Shopping Fears Key Insights 1. Nearly 9% in Online Sales are Lost Annually Due to Consumers Security Concerns Roughly $21B in online sales revenue is lost annually because victims of identity theft have stopped shopping online (12%) or because consumers do not believe that the Internet is safe enough for online shopping (13%). 2. Most Consumers Would Blame Merchants for Identity Theft 60% of consumers would blame the online merchant if the consumer were a victim of identity fraud as a result of shopping online. 3. Secure Web Site Logos Indicate Trustworthiness of Web Site 86% of consumers stated that they look for a secure web site logo, such as VeriSign or TRUSTe, to determine whether a web site is trustworthy. 4. Consumers Need Security Assurances from Merchants 83% of consumers indicated that online merchants assurance of secure processing of payment and personal information would be the most motivating factor for shopping online in the future. 5. Fraud Victims Would First Seek Assistance from Payment Providers Nearly half (47%) of consumers stated that they would seek assistance first from their payment provider (e.g. bank or credit card company) if they were a victim of identity fraud. About this Study First Data was one of the sponsors for the Consumer Online Shopping Fears study conducted in December 2008 by Javelin Strategy. 2,000 U.S. consumers completed a survey (1,000 via telephone and 1,000 online) to determine their attitudes and behaviors about shopping online and to uncover the specific nature of consumer fears related to online shopping. The total annual financial loss due to consumer online shopping fears was estimated based on the results of this study. Prepared by: Sharon Brant Director Media Contact : Mediarelations@FirstData.com ( ) Investor and Analyst Relations Contact: Silvio.Tavares@FirstData.com ( )

2 Key Insights #1: Nearly 9% in Online Sales are Lost Due to Consumers Security Concerns Roughly $21B (8.6% of total annual online sales) is lost annually in online sales revenue because victims of identity theft have stopped shopping online (12%) or because consumers do not believe that the Internet is safe for online shopping (13%). 17% of online shoppers have been a victim of identity theft. As a result of identity theft, 40% of victims only purchase from well known shopping sites. The continued trend of consumer online shopping fears has proven beneficial for alternative payment providers such as PayPal. Revenue Opportunity Lost Calculations (Annualized Using December Values) December Opportunity Cost Non-Victims Subtotal (13% of Consumers Do Not Believe the Internet is Safe Enough for Making Online Purchases) Victims Subtotal (12% of Victims No Longer Shop Online) Annualized Opportunity Cost $2B $1.37B $0.67B $21.1B * 2008 online sales, including travel, estimated at $242B (Source: emarketer) Calculation is based on the following: Victims: Have you or a family member ever been a victim of identity theft? Yes, both a family member and I have been victims of identity theft Yes, I have been a victim of identity theft Yes, a family member has been a victim of identity theft No, neither a family member nor I have never been victims of identity theft Non-Victims: Those who believe the internet is not safe enough for making online purchases (Bottom-2) = 13%. December value deflated by.86 for seasonality and then annualized Respondents who answered yes = victims Page 2

3 How Has Identity Theft Affected Your Online Shopping Behavior Only Purchase from Well Known Shopping Sites 40% Not Affected Decreased Online Purchases Use Debit Card Less Online Use Credit Card Less Online Use Alternative Payment Methods Spend Less Money Online 26% 25% 24% 21% 21% 19% No Longer Shop Online 12% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Date: December, 2008 N = 378 Base: Online shoppers who are fraud victims Page 3

4 Key Insight #2: Most Consumers Would Blame Merchants for Identity Theft 60% of consumers would blame the online merchant if the consumer were a victim of identity fraud as a result of shopping online. Nearly one-quarter (22%), however, are not sure who is at fault. Because the majority of consumers blame merchants for identity theft caused by online shopping, First Data has the opportunity to become a thought leader in this area by educating merchants and providing consumers with information about what to do if they were a victim. If You Were to Experience Identity Theft as a Result of Online Shopping, Who Would You Consider to be Primarily at Fault? Other, 10% Not Sure, 22% Online Merchant, 60% Payment Provider, 8% Date: December, 2008 N = 1983 Base: All respondents Page 4

5 Key Insight #3: Secure Web Site Logos Indicate Trustworthiness of Web Site 86% of consumers stated that they look for a secure web site logo, such as VeriSign or TRUSTe, to determine whether a web site is trustworthy. 81% of consumers indicated that they would seek personal recommendations from family or friends in determining whether an online store was trustworthy. Do You Take Any of the Following Actions to Determine Whether an Online Store Has a Trustworthy Web Site? Check for Secure Web Site Logo Personal Recommendations from Family/Friends Guarantee of Identity Theft Protection 78% 86% 81% Product Satisfaction Guarantee 77% Link to Online Privacy Policy 60% 3rd Party Reviews 56% BBB "Online Reliability" Logo 50% 0% 20% 40% 60% 80% 100% Date: December, 2008 N = 1459 Base: Online Shoppers Page 5

6 Key Finding #4: Consumers Need Security Assurances from Merchants 83% of consumers indicated that online merchants assurance of secure processing of payment and personal information would be the most effective in motivating them to shop online in the future. Quality and cost guarantees, such as purchase will match quality expectations and best online price are also effective motivating factors. First Data has the opportunity to provide merchants with security consulting services in addition to software and gateway solutions and identify ways to better position the merchant as a secure shopping site to consumers. How Effective are Each of the Following in Motivating You to Shop Online in the Future? (Top-2 Box)? Assurance that Info is Processed Safely Guarantee to Reimburse for Losses Due to ID Theft Stronger Security at Store Web Site Guarantee that Purchase Will Match Quality Expectations Guarantee of Best Online Price Lower Shipping/Handling Fees Guarantee that Purchase Will Arrive Undamaged Guarantee of Ontime Arrival Convenient Returns and Refunds 83% 81% 80% 80% 79% 79% 78% 75% 74% Faster Online Checkout 59% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Date: December, 2008 N = 1620 Base: Respondents Who Expect to Make Future Online Purchases 5-Point Scale Page 6

7 Key Insight #5: Fraud Victims Would First Seek Assistance from Payment Providers Nearly half (47%) of consumers stated that they would seek assistance first from their payment provider (e.g. bank or credit card company) if they were a victim of identity fraud. 14% of consumers don t know who to turn to for help if they are a victim of identity theft. If You Were to Experience Identity Theft as a Result of Online Shopping, Who Would You First Seek Assistance From? Not Sure 17% Other 5% Online Merchant 14% Federal Trade Commission 3% Police/Law Enforcement 14% Payment Provider 47% Date: December, 2008 N = 1988 Base: All Respondents Page 7