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Posted By:  Red Stag Fulfillment on 12/22/2017 in Ecommerce

The One Big Reason Why E-Commerce Security Is More Important Than Ever

The One Big Reason Why E-Commerce Security Is More Important Than Ever

When someone steals data from your online store, it harms your relationship with your customers. If the breach is small, you’ll likely lose those few impacted customers as well as their friends and family. If the breach is large, you could see your doors shut for good.

Customers, partners, and financers are all paying attention, especially when poor security leads to theft of personal information and credit card numbers.

The one thing that the recent spurt of data loss and theft taught is that reputational damage has a direct impact on current revenue and future viability. Large companies have the resources to respond and make amends, but do you?

Perhaps the better question: do you want to find out?

You only need to lose trust once

So, why is all this important to your e-commerce health? The big reason is that you only get one shot.

A OnePoll study found that 87% of people say they are “not at all likely” or “not very likely” to do business with a company that has lost credit card information. Target faced an initial 46% decline in year-on-year sales in the fourth quarter of 2013 after the breach hit the news. Big brands are the lucky few that can eventually bounce back.

When there’s a breach and you’re not a major retailer, you can lose everything. Even though breaches are becoming less costly — thanks to tips like those above — they still on average cost a business about $3.62 million. For each stolen record, you’re looking at a cost of $141.

If your margins are thin or your customer volume isn’t very high, this can easily break the bank. Plus, being hacked can make it more difficult to get new customers to replace those that leave. It even becomes more difficult to get financing from a bank.

In short, the damage could be irreparable if you face a large breach.

There’s a new m-commerce world

As we recently discussed, mobile was a big sales driver during the 2017 Black Friday. Mobile devices accounted for 54.3% of website visits on the day and 36.9% of all online revenue that day. Overall increases and big-day spending jumps are leading experts to say that, by 2020, mobile-commerce will dominate e-commerce.

The downside for your business is that not all e-commerce safety measures work for m-commerce. You need a specific mobile plan, including tracking of things like chargeback rates specifically to your mobile channels. Plus, expect new areas of fraud — typically from locations with higher densities of mobiles and free Wi-Fi.

Mobile shopping carts have a roughly 66% abandonment rate, with payment difficulties or a lack of security viewed as top reasons for this. A bright spot is that Amazon’s patent for a one-click purchase button expired and the process will be open for all.

Get started now, if you haven’t already. U.S. credit and debit cards now come with the EMV chip. In other countries, this shift has led to a rise in fraud where the card is not present (CNP). If you’re not paying attention to your mobile channels, they’ll look tasty to CNP fraudsters.

Don’t forget fulfillment security too

Protecting your digital infrastructure is one core component, but you can’t forget to review that real-world infrastructure protecting your inventory. We recommend focusing on the fulfillment center as a place to be your backup.

Follow traditional e-commerce best practices like having order management and payment systems backed up, as well as physical checks for staff and drivers. It can also make sense for you to look for partners who specialize in fulfillment to keep you safe.

Amazon’s fulfillment services have significant backups and protections, while we at Red Stag Fulfillment use a combination of generators, smart access, and multiple internet service providers to not only safeguard data but ensure you have access to orders and inventory in the event of a natural disaster or outage of power or internet.

Protecting customer wallet and identity security

There’s no panacea for a safer site. It all depends on what you’re doing and aren’t doing today. However, some things should be applied across the board.

Here are a few tactics to maximize security, reduce fraud risks, and make customers happier:

  • Limit the information you collect on customers and purge anything that’s unnecessary. Today, browsers tend to capture and keep credit card information, so you no longer need to keep card numbers, verification codes, addresses, or expiration dates on hand.
  • Upgrade to secure checkout options. People are going to be looking for the SSL security seal, such as the green “Secure” that Chrome displays.
  • Monitor access to your data, including your employees.
  • Have your IT team review systems and processes at least once a month. You want them to check for known bugs as well as updates. If an update is available, install it. Delays can cost you big time, especially if it’s a zero-day exploit.
  • Review and troubleshoot system connections. Run checks of how your system interacts with other platforms, like your order management and customer relationship tools as well as any interactions with third-parties like warehouses and distributors.
  • Ask for stronger passwords and security questions. Your customer will sometimes be the weak link, so make it easier for them to be secure by removing the chance that they can use “password” or “12345” to store their credentials with you.

Those are just a few thoughts to get you started. Remember, it’s always a safe idea to have in-house IT professionals and security professionals review your site and services. If you don’t have someone in-house, it’s time to get a consultant to help you protect your customers.

Always be transparent

A final, but key component of your store security is how secure you make customers feel.

Most customers assume you’re going to make some use of their data and store different elements on your servers, from shopping habits to purchase information and their home address. They deserve to know what you’re doing.

Transparent policies around data collection and usage are best practices to help users feel secure. Plus, if you’re using cookies and other tracking elements, you’re required to notify visitors of these policies. This disclosure doesn’t have to be a bad thing.

Consider telling users that you look at trends of what people buy — specifying that you don’t track them individually — to know what people like the most or learn what goes well together. That allows you to provide more deals on related products or create kits that include this season’s must-haves, so the customer gets to save more and still get everything they love.

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