Gartner: Nearly $2 Billion Lost in E-Commerce Sales in 2006

Due to consumer’s concerns about the security of the Internet, nearly $2 billion in U.S. e-commerce sales will be lost in 2006, according to a survey by Gartner, Inc. According to the Gartner survey of 5,000 online U.S. adults in August 2006:

  • Aapproximately $913 million in 2006 e-commerce sales is lost because of security concerns among online shoppers. 

  • Another $1 billion is lost because of shoppers who refuse to shop online because of security concerns.

Nearly half of online U.S. adults, or 46% of more than 155 million people, say that concerns about theft of information, data breaches or Internet-based attacks have affected their purchasing payment, online transaction or e-mail behavior. Of all the behaviors affected, online commerce (including online banking, online payments and online shopping) is suffering the highest toll.

Gartner estimates that due to these security concerns:

  • 33 million U.S. adults were kept away from banking online. 

  • 9 million U.S. adults have stopped online banking altogether 

  • 23.7 million won’t start online banking because of their security concerns.

  • Nearly 70% of online consumers say that their concerns have affected their trust in e-mail from companies or individuals they don't know personally.

  • Of these, more than 85% delete suspect mail without opening it.

“Financial institutions and other e-commerce service providers need to beef up security in their online channel to retain customers, but they must be careful to keep the added measures relatively convenient,” said Avivah Litan, vice president and distinguished analyst at Gartner.

Gartner recommends that enterprises employ a two-prong strategy — one part to increase consumer confidence and one part to reduce fraud and keep the crooks out.

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