A growing concern about how secure retail apps are and how they make use of consumer data is preventing many shoppers from downloading such apps.
Three out of every four shoppers believe their information stored inside retail apps may not be very secure.
This eye-opening revelation was made by new research conducted by mobile technology solutions provider Apadmi. The research highlights that a third of all shoppers are not comfortable with sharing their personal information on retail apps as they didn’t know what it would be used for, thus highlighting that aside from security, privacy is another major concern with retail apps.
The importance of cyber-security in apps run by retailers gains more importance given that a research in 2015 had unearthed that 64 per cent of consumers worldwide were unlikely to shop or do business again with a company that had experienced a breach where financial information was stolen.
“As companies collect ever-increasing amounts of customer data and as our digital interactions become more diverse, more data about what we do, who we are and what we like is being stored online. The survey proves that the traditional data security mind-set needs to evolve, this goes for companies and consumer adoption of advanced security measures like two-factor authentication," said Jason Hart, vice president and chief technology officer for Data Protection at Gemalto.
“Otherwise, an increasing number of consumers will cut ties with companies who aren’t taking data protection seriously, and take their business to someone they can trust,” he added.
While security and privacy are key issues, lack of innovation is another thorn preventing shoppers from showing much interest in retail apps. Of those surveyed, only 40% of consumers were satisfied with current retail app offerings, and 34% believed the retail apps they used did not feature any improvements of late.
Despite such concerns from a sizable class of shoppers, retail apps have continued to be popular, with a third of all consumers downloading more retail apps in the last 12 months than the previous year. "Nearly 40% of consumers now have at least one retail app on their smartphone, according to market research company Forrester, while more than a quarter have between 3-5 retail apps. One in 10 consumers have as many as 10 retail apps on their phone," said the report.
"As well as more consumers overall downloading retail apps in the last 12 months, the fact that younger shoppers are beginning to favour apps – even above shopping via a laptop – indicates that mobile apps will only become more popular in the future," it added.
When asked about what they would like to see in retail apps, a little over half of all consumers (54%) said they expected better incentives and loyalty schemes, 33% wanted better customer service, 38% wanted rewards for using apps, 18% wanted biometric payment options, 13% wanted voice recognition to pay for products and 29% wanted the same level of customer service as in store.
“Consumers are more willing to shop via a retail app than ever before, but retailers need to do more to reassure them that their personal information will be safe and won’t be used for anything other than notifying them of deals and offers, or improving their shopping experience. It remains clear that until retailers can convince consumers that their information and data will be secure, mobile shopping apps will fail to reach their full potential,” said Nick Black, CEO of Apadmi.