Securing customer data a priority for retailers

Australian retailers need to address security issues within retail stores to reduce risks and improve the quality of the retail experience for customers, according to a panel of industry experts.

The panel which met in Sydney on Wednesday, May 18, 2016, was moderated by Frost & Sullivan’s Australia and New Zealand managing director, Mark Dougan. Participants included, Mark McGeachen, CEO of AdvanceRetail Technology; David Higgins, ANZ regional director, WatchGuard Technologies; and Brad Drysdale, APAC chief technology officer, MuleSoft.

In store challenges

The panel highlighted security issues within retail stores that need to be addressed to reduce risks and improve the quality of the retail experience for customers.

Mark McGeachen, CEO of AdvanceRetail Technology, said: “Online and in store security is a massive issue for retailers as about 90 per cent of transactions involve credit or debit cards. This means there is a lot of payment and personal customer data that is being collected and stored, and retailers need to be sure this data remains secure.

“The issue becomes a more complex one when that data is handed over to third-party operators such as companies running loyalty schemes. Some of these work with multiple retailers and are handling vast quantities of personal data. It is difficult for a particular retailer to ensure that their customer’s data remains secure,” he said.

David Higgins, ANZ regional director of WatchGuard Technologies, pointed to instances where store point of sale terminals had been targeted by criminals in attempts to skim credit card and personal details.

“Often, retailers focus their security investments on their core IT systems but don’t pay sufficient attention to branches or retail stores where problems can occur,” he said.

Mr Higgins also pointed to the growing tendency for retailers to offer free Wi-Fi services for customers.

“While convenient, many of these networks have little or no security in place. Customers are often wide open to man-in-the-middle attacks as they have no way of discerning between a legitimate Wi-Fi hotspot and a nefarious one set up with the same SSID.

“Retailers need to look at deploying systems that issue one-off passwords to users and limit the amount of data that can be downloaded in a session.”

Australian retailers losing online revenue due to security concerns

The panel also found Australian retailers are missing out on lucrative online sales by failing to address consumer frustrations around privacy, security and website functionality.

Mark Dougan, managing director of  Frost & Sullivan, said: “While consumer enthusiasm for internet-based retailing remains relatively strong, many highlight privacy and security concerns as key reasons they are not shopping online.”

Online retail growth is also being curtained by the poor transactional capabilities of many websites and a lack of efficient back-end integration. The panel agreed that, even though retailers want to offer a seamless experience for shoppers, only a very few are making the grade.

Brad Drysdale, APAC chief technology officer of MuleSoft, said many retailers still relied on manual processes to take orders placed on websites and get them into back-end systems for processing and product delivery.

“Retailers have more insights than ever before into their customers’ tastes, needs, wants and buying habits. To take full advantage of all this customer data, they need an effective way to aggregate the information and integrate it with their various systems and operations for all areas of business, including inventory management, product development, advertising, customer relationship marketing and sales,” said Mr Drysdale.

Targeted investment required

The panel agreed many Australian retailers have adopted an almost ‘set and forget’ attitude toward their online offerings. After first building a web presence and later making it mobile responsive, they have returned to focusing on their bricks and mortar operations.

“Research shows Australia lags major global markets when it comes to retail spend,” said Mr Dougan.

“Online sales in Australia were just 6.6 per cent of total retail sales in the 12 months to January 2016. This places Australia at only about half the level of the United Kingdom where online sales in January 2016 reached 13 per cent of total retail sales and well behind the United States where online sales are estimated to be 9.3 per cent of all sales.”

The panel concluded that more investment in security and system integration, together with better consumer education around security and risks, was required.

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