Every time you go online to check the news, it feels like there has been a new data breach at a blue-chip company. Poor IT practices, lack of continuity with legacy systems, and an increased level of sophistication from cyber criminals are all making data breaches increasingly common.
The problem is that the typical consumer may feel like there is very little they can do to change things. That said, there are some marked changes in consumer behavior seen within certain parts of the market.
Shifts In Brand Loyalty
A data breach is not so much a complex technical incursion to the average customer or consumer as it is a breach of trust. They have provided personal and financial details on the understanding that they will be looked after and treated with respect, only to find that this has not been the case.
Consumers generally don’t care about who in the supply chain is responsible, or whether or not a third-party contractor is at fault — they will associate the breach with the core brand.
Once their trust has been broken, loyalty takes a hit, and they will naturally start to consider whether they are prepared to accept what has happened.
The problem for these businesses is that they will soon not just lose orders, but do so to their nearest competitors as their existing customers look for like-for-like replacements and substitutes.
Generational Differences
Interestingly, it’s the so-called Baby Boomer generation who have been shown to be most likely to change their purchasing habits as a result of a data breach.
Gen Z consumers have grown up in the age of global breaches, and while you may assume they are more likely to change due to higher levels of tech fluency, this is not borne out by the data.
Granted, this is a generalization, and it will often be the case that there are individuals within any group or demographic who are more or less affected by breaches.
The key point is that older citizens — those who, on average, have higher levels of purchasing power — are more likely to change their behavior as a result of a breach.
Increased Personal Responsibility
A natural extension of the previous point is that individuals will put greater stock in finding a supplier or service provider they feel they can trust. For example, imagine that you are looking for an index trading broker so that you can enter the financial markets. The overwhelming majority of people will look for a service that is:
- 100% compliant with the latest rules and regulations around data governance.
- Tightly regulated and fully aligned with the latest standards in the industry.
- Proven as a leader in its field and supported by thousands of online testimonials.
Whether it be trading, subscribing to a streaming service, setting up an online bank account, or a shopping account, consumers are taking control of who they choose. They are increasingly seeing it as their responsibility to identify the most trustworthy and reliable people to do business with online.
The problem for businesses is that they will have to spend more and more on their marketing to communicate their message in new ways. Even if they have no history of being breached, they may find that their brand is tied to a market where breaches are common.
Restricted Online Purchases
There are even some who will take a step back from the digital world and decide that they want to go analogue in some instances.
Of course, there are instances where this is not possible, such as if a consumer wants a secure MT4 download so they can trade online — in this instance, the consumer will look for the most trustworthy brand available. But in cases where there is an analogue equivalent, certain brands are noticing a sharp decline in online sales.
If a consumer has found their data has been leaked by an e-commerce platform, for example, they may feel a strong sense of betrayal and move back to shopping in person.
Moving back to using cash in a physical store is not something everyone will do, but it may be enough to highlight how certain demographics and avatars are unwilling to compromise when it comes to their security.
Final Thoughts
As with many things in life, people like to be connected with individuals, companies, and brands they trust. When it comes to making purchases online or supplying personal and financial data to be electronically stored, this is more apparent than ever.
Consumers (particularly older generations) are increasingly voting with their feet and moving service providers or looking for alternative e-commerce stores when data breaches occur.
Putting the technical details aside and seeing it as a matter of trust is the key point here. Businesses that understand this will be the ones most motivated to take the steps needed to maintain trust and protect the reputation of their brands.
