Retail businesses losing consumer trust due to rise in fraud, new research reveals
New data from digital transformation consultancy Daemon reveals that cyber security issues continue to plague Brits, particularly whilst shopping online. In the last 6 months alone, 36% have fallen victim to phishing scams, with other common issues including non-delivery of items once purchased (33%), credit card fraud (30%), counterfeit goods (28%) and identity theft (17%).
These challenges vary by demographic. While one quarter (25%) of GenZ have faced identity theft, only 9% of Millennials and Baby Boomers have experienced the same. Meanwhile, 57% of Baby Boomers have been targeted by phishing scams, compared to 36% of Millennials and 31% of GenZ.
Online fraud is leaving a lasting impact on trust. When asked if the fraud/scam/theft experienced caused them to trust the online retailer less, 42% reported having significantly less confidence in the retailer. When asked what would restore trust, 45% of consumers called out quick and accessible customer support for security concerns. Other trust builders include displaying security certifications and badges from trusted third-party providers (30%) and using AI to detect fraud (24%), which consumers said make them feel more confident when shopping online.
Marc Peiser, cybersecurity expert, Daemon comments: “The prevalence of scams and fraud that consumers have reported experiencing in such a short time is alarming. As customer trust becomes inseparable from their shopping experience, it’s clear that retailers must bolster their cyber security efforts to safeguard their customers and maintain strong relationships.”
Insecurity extends to payment methods
When it comes to personal finance and cyber security, over half (57%) of consumers consider cash the most secure payment method, followed by credit and debit cards (44%) and Paypal (38%).
However, perception of payment security varies significantly by age. While only 12% of Baby Boomers trust digital wallets, this rises to 26% among Millennials and 40% of GenZ. Conversely, 67% of Baby Boomers view cash as very secure, compared to 50% of GenZ. When it comes to Buy Now Pay Later (BNPL) 27% of GenZ see it as a secure option, compared to only 15% of Millennials and 9% of Baby Boomers.
Peiser continues, “As retailers introduce more payment options, it’s clear that consumer preferences must be factored in. There’s also a need for greater education around the security of newer payment methods to boost adoption, especially as cash usage continues to decline.”
What about in-store threats?
While online threats remain a concern, in-store security risks are on the rise, significantly impacting consumer safety. In-store, 38% would like to see an increase presence of security guards, rising to 43% among Baby Boomers. 35% want more CCTV cameras, a figure that jumps to 38% for GenZ. Other popular security measures include AI to support detection (14%) and smart vending machines, with interest from 20% of GenZ. However, 19% said there was nothing no additional measures would make them feel safer when shopping in-store.
In the case of increased shoplifting cases in-store, a quarter (25%) of consumers believe they are unlikely to be caught and prosecuted.
Peiser adds, “Neglecting to implement robust security measures is damaging the in-store shopping experience. If consumers feel unsafe, retailers risk losing a loyal customer base. Retailers need a holistic approach to security that integrates both in-store and online protections, or they may face lasting changes to consumer behaviour.”
