The NRF (National Retail Federation) Retail’s Big Show is a major showcase for new initiatives, offerings and digital innovations in the retail industry. The main focus of this year’s edition, which took place recently, was security issues associated with data and online and contactless payment systems.
The leading digital trends for retail were showcased at the latest Retail’s Big Show: omnichannel for pure-play and brick-and-mortar retailers, using data to personalise offerings, simplified analytics solutions, m-payment, and unified IT platforms to ensure a seamless customer experience.
Will the solutions on show at NRF 2016 reverse the trend revealed by the survey of digital practices conducted in 2015 by Sia Partners, Econocom and Ifop? According to the report, the majority of French organisations have not yet taken full advantage of cross-channel and Big Data.
2015 was also notable for increasing awareness of cybersecurity issues in the B2C sector. And the wave of digital innovations unveiled at Retail’s Big Show did nothing to allay concerns over the increase in malware attacks. After the hacking of TV channel TV5 Monde, dating site Ashley Madison, and the Hello Kitty and Vtech connected toys, the vulnerabilities detected on smart cars, smartphones and a number of connected devices, some high-profile hotel chains were targeted. The latest of these was Hyatt, whose customer data was hacked into through credit card payments on certain websites. The incident, discovered in December 2015, began back in August, according to the group. This is not uncommon: most cyberattacks go undetected for months, whilst an advanced attack can go undetected an average of 229 days.
Retailers are prime targets for hackers. Online and in-store credit card payments, collecting consumers’ personal data: retailers, particularly ones with e-commerce sites, are highly vulnerable and often don’t take the necessary security precautions. According to forecasts by OWASP (Open Web Application Security Project), 80% of successful attacks exploit known vulnerabilities.
And it’s affecting growth: the rise in e-commerce is failing to take off for small and mid-sized companies due to lack of customer trust. As part of a campaign to encourage small businesses to implement security measures, the UK government conducted a survey which revealed that 59% of consumers are put off buying from small firms online, and 82% would buy more if they could show they were protected from cyber crime.
In France, meanwhile, over 50% of e-commerce sites don’t protect their customers’ data –even the larger players. And this figure is even higher with smaller businesses. And yet, paradoxically, the latest figures from Fevad, the French e-commerce federation, show that 2 out of 3 online users bought their Christmas presents and 25 million French people shopped online during the sales. In Europe, e-commerce accounted for 6.7% of retail revenues in Western Europe in 2014, and this is set to reach reach 10% by 2018.
There have been a number of innovations in m-payment recently: the 3D secure protocol developed by Visa and MasterCard is one example of this, but as it adds an additional layer to the payment process, it could put off consumers, which explains why it hasn’t been widely adopted by e-commerce platforms.
Another new feature is the dynamic cryptogram, which a number of banks are adopting instead of the 3-figure cryptogram on the back of cards. And at this year’s CES in Las Vegas, MasterCard presented a payment system using a selfie.
What about contactless NFC payment and e-Wallet applications? By developing encryption, tokenization and authentication systems (PIN codes, fingerprints, etc.), Apple Pay, Android Pay and Samsung Pay have been making considerable efforts to convince users, banks and retailers to adopt digital wallets. Recently launched (2014 and 2015), in a limited number of countries and smartphone models, these services have yet to take off but could be the future of secure payment.
Some experts believe the next major m-payment trend is multi-channel payment solutions, for consumers who begin shopping online and end up in brick-and-mortar stores: but will it catch on with the leading retailers?