It’s no surprise that buying behaviors have seen significant change over the past several years. Global online e-commerce sales are expected to double between 2016 and 2020. According to the U.S. Bureau of Economic Analysis (BEA), personal income increased $54.8 billion (0.3%) in July of 2018, while disposable personal income (DPI) increased $52.5 billion (0.3%) and personal consumption expenditures (PCE) increased $49.3 billion (0.4%). July’s increase in personal income was a result of salary increases, rental income, and personal dividend income. The $29.6 billion increase in PCE in July led to an increase of $10.9 billion in spending for goods and a $18.9 billion increase in spending for services.
Online shoppers are experiencing a new wave of e-commerce, one that’s highly personalized to that individual’s shopping interests and behaviors. Brands are putting more dollars behind personalization, where they capture customer data points and present those customers with relevant content and products to encourage an online sale. By capturing search queries, shopping cart, geographic location, purchase history, social behavior, and customer segments, brands are able to alter their site’s content to best serve each individual customer. More than ever, e-commerce companies must also compete with one another.
How does the increase in online shopping affect the Internet itself?
As more money is spent online, data breaches are expected to rise. According to a study by Ponemon Institute, the average data breach costs $3.62 million. Dark web criminals are not only stealing people’s social security and credit card information, but they are using stolen information to apply for credit cards and make their own purchases. In response to the increasing threat of stolen online data, the number of identity theft security companies has increased, but is that enough?
While data breaches are increasing, both e-commerce companies and consumers need to be vigilant. Online retailers need to be extra careful with customer data and websites should be secure and encrypt transactions. On the consumer side, people can be better educated on security issues and privacy issues. Reading Understanding Your Online Identity: Protecting Your Privacy is a good first step.
The takeaway? The majority of sales are occurring online, and with that, Internet security breaches will continuously occur. The Internet economy is outperforming the physical retail store economy, and if your company is involved in e-commerce, you should take the extra steps needed to make sure your online infrastructure and customer data are secure. Missing out on this step could be a setback your company can’t bounce back from.