Research and retrieval of news articles by:
Bennett Gold LLP, Chartered Professional Accountants

SPECIAL NOTE TO ALL VISITORS:
Effective December 31 2012, articles are no longer being updated on this web site.
The site is now maintained as an historical archive, covering notable e-commerce news articles from the period 1999 to 2012.

SITES MUST 'SCREAM' SECURITY AND PRIVACY

E-tailers who want to have a merry season must overcome dual concerns before shoppers can be lured on-line, experts say

Posted on November 16, 2000

      Anita Mormile is a veteran Web user -- but she has never shopped on-line because she doesn't feel comfortable giving out personal and financial information to e-tailers.

      "With a store in the mall, you watch the clerk run your card through and you get a receipt. On the Web, I don't know where my information is going. Hackers could be looking at it, for all I know," says the 32-year-old accounting clerk, sitting in the food court of Toronto's Sherway Gardens mall.

      Consumers such as Ms. Mormile represent both the hope and fears of e-tailers as the holiday shopping season gears up. Visions of sugar plums are dancing through e-tailers' heads as they prepare for what they hope is an on-line Christmas shopping blitz this year. But experts caution that e-tailers could fail to attract shoppers if they neglect to allay strong consumer concerns about the security and privacy of their on-line transactions.

      There are more people on-line -- and more people buying -- than ever before, but the proportion of buyers to surfers hasn't increased. Market research firm Pollara Inc. finds about 10 per cent to 12 per cent of Web surfers shop regularly.

      "I think it's been a disappointment for a lot of people to find there hasn't been exponential growth in shopping behaviour," says Duncan McKie, president of Pollara in Toronto.

      By far the biggest barriers to on-line shopping are privacy and security fears: concern that a user's credit card number could be stolen by a thief and worries that personal information could be exploited by unscrupulous marketers.

      "On-line shoppers don't make the distinction between security and privacy. They see it as a package," Mr. McKie says.

      The successful e-tailer must aim its strategy at alleviating these twin concerns, says Chris Ferneyhough, a senior research manager at Ipsos-Reid Corp. in Vancouver. "It has to scream security and scream privacy regarding the information it is collecting on you."

      The surest way to give shoppers confidence in a site is to form a partnership with a well-known bank or another financial institution that can help process transactions, say Mr. McKie and Mr. Ferneyhough.

      The familiar logo of a Canadian bank or a credit card company on a site gives customers more confidence about its security.

      "Banks: We love to hate them, but we trust them," Mr. McKie says.

      Barring an overnight change in attitudes, e-tailers should also keep in mind Canadian on-line shoppers' spending limits when designing site offerings. Polls show shoppers tend to spend between $25 and $50 on each transaction. That means a site selling mink coats is probably out of the question for now.

      "It's fairly clear people are hedging their bets and buying things that don't put them at risk to any great degree if something should happen," Mr. McKie says.

      Martin Wales, founder of Customercatcher.com and a business development specialist based in Toronto, recommends that on-line stores spell out clearly their privacy policy to shoppers, stating what will be done with the information collected and whether it will be sold to other companies. "A lot of people don't have a clear privacy policy right now."

      But e-tailers shouldn't despair. In absolute terms, the number of Canadians shopping on-line is growing. Mr. Ferneyhough says the firm's research suggests as many as 500,000 more Canadians intend to buy a Christmas gift on-line this year as opposed to last. In total, it estimates 2.7 million Canadians will gift shop on-line this season.

      While percentage-wise only a minority of Canadians buy on-line, many more are using Web stores to browse, research and comparison shop before they make an off-line transaction, researchers say.

      Web stores need to provide reliable off-line support and assistance so they can draw buyers who prefer to purchase items from a human rather than a machine -- whether by telephone or at a store.

      "Make it easy to identify where they can purchase these products and then have those products there [in stock]. It sounds like common sense, but hey, it's not happening," Mr. Wales says.

      It's estimated that between 33 per cent and 63 per cent of surfers use Web stores to research purchases before buying elsewhere.

      To increase traffic to an on-line Web store, Mr. Wales recommends advertising in media such as newspapers. "The most powerful way to get people to your Web site is to use traditional media. It's not good enough to rely on search engines" to help people find you, he adds.

      Mr. Wales also suggests on-line stores help harried Christmas shoppers with gift suggestions tailored to the age and sex of the recipients.

What to look for in an on-line store:

• A clear privacy and security policy spelled out on the site that describes how secure the transaction is and what the retailer proposes to do with personal information collected for the sale. Will it give or sell it to other companies? Will it use a customer's e-mail address for future marketing? Does it provide the option of refusing future e-mails?

• A clear definition of shipping charges: Who pays the fees for shipping and who pays the return charges should the customer send it back? Ensure the company issues cash or credit card refunds.

• Policies spelling out whether the company will replace items damaged in shipping.

• Telephone numbers to call (preferably toll-free) and a brick- and-mortar address to contact the company if something goes wrong.

• Opinions and reviews from Web sites such as epinions.com that tell if other consumers have had good or bad experiences with the company in question.

E-Commerce Alerts are issued by Bennett Gold LLP, Chartered Professional Accountants as situations develop. Bookmark this site and check back often. Our e-mail address is: info@BennettGold.ca

In accordance with United States Code, Title 17, Section 107 and Article 10 of The Berne Convention on Literary and Artistic Works, the news clippings on this web site are made available without profit for research and educational purposes.

ALERT
ARCHIVES
Final Entries
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999