Friday, August 19, 2016


New UTSA study delves into data breaches and customer confidence

New UTSA study delves into data breaches and customer confidence

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(July 25, 2016) -- According to a new study by H.R. Rao, AT&T Distinguished Chair in Infrastructure Assurance and Security at The University of Texas at San Antonio (UTSA), the willingness of online shoppers to return to a store after a breach is mostly dependent on age.

Online shopping has been on the rise for some time, in many cases even replacing physical stores for things like books and electronics. Rao notes in his study that the industry’s success can be partially attributed to the strength of secure payment methods.

Recently, however, data breaches have threatened the perceived security of e-commerce. Rao and his colleagues began their research just after the 2013 data breach that significantly affected Target. Data from roughly 70 million customers’ debit and credit cards was stolen.

“We decided to examine how much people trust online shopping and how their attitudes might change after a breach,” he said. “We found there was a clear demarcation in the way younger and older adults looked at the incident.”

While Rao found that most people would be more careful after their data had been compromised or even avoid stores like Target after a breach, younger adults were less likely to change their behaviors.

“The differences are in terms of trust,” he said. “Younger people seem to believe that these breaches are just a part of living with technology, but the older generation hasn’t grown up with that same exposure to technology, so they aren’t as trusting.”

Rao and his colleagues had some sense that there might be an age divide in developing trust toward companies like Target after a breach, but he said he still found the results surprising.

“In the end, it’s all about the propensity to take risks,” he said. “The younger generation is simply more comfortable with online behavior, from posting on social media to shopping online.”

Rao found that the younger generation seemed to value convenience more than security, while older adults were inclined to avoid stores affected by data breaches altogether. As Target and other companies work to recover their public image, he hopes the UTSA study will persuade e-commerce sites that they need to do a better job of reassuring their customers after an incident.

“It’s vital for these companies and sites to reestablish trust with their customers,” he said.


Read H.R. Rao’s study “Online shopping intention in the context of data breach in online retail stores: An examination of older and younger adults.”

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