Eye on Retail: Data breaches may impact holiday shoppers
A majority of American shoppers will base their holiday shopping destinations on whether the retailer experienced a data breach in the past.
Eighty-four percent of respondents said their willingness to shop with some retailers will be impacted if the brand has experienced a data breach, according to a survey conducted by Generali Global Assistance (GGA), a provider of a proprietary identity and digital protection platform.
According to data, among those who plan to shop for the holidays, 75% expressed concern about their financial or personal information being compromised due to a data breach.
While the vast majority of Americans (91%) plan to do holiday shopping this season, most are skeptical that businesses are doing all that they can to protect their personal information. Meanwhile, 40% of consumers said businesses are not doing all they can to protect their personal information.
And their concerns span all channels. Just over half of shoppers (57%) believe a data breach of an online merchant will pose the greatest identity theft threat this holiday season, while 22% consider a data breach of a brick-and-mortar point-of-sale system to be the most acute risk.
Over half of all Americans (55%) would have more confidence that businesses are actively working to protect their data, and reduce their risk of identity theft or fraud, if companies offered identity protection services, whether for free or at a cost. Retail businesses that currently offer identity protection services, or that plan to do so in the future, instill greater confidence in 56% of Americans.
Data breaches — and identity theft — weigh much more heavily on holiday shoppers' minds than being pick-pocketed or robbed (11%), or having their car broken into (10%).
"Consumers are clearly more concerned than ever about identity theft and related issues as we enter the 2017 holiday season,” said Paige Schaffer, president and COO of Generali Global Assistance's Identity and Digital Protection Services Global Unit.
“With data breaches at major organizations occurring so frequently and impacting literally millions of people in the U.S. alone, consumer confidence in the ability of businesses to protect their data has been shaken,” said Schaffer. “This is why identity protection is so essential in this day-in-age. For many consumers, stress is at a year-round high during the holiday season. Offering identity protection is an effective way for businesses to help restore trust in their commitment to protecting customer data, as well as provide more peace-of-mind to consumers so they can focus what matters most to them this holiday season."
Despite concerns over data breaches, the most popular form of payment for holiday purchases this year will be credit cards, followed closely by cash (49%) and debit cards (41%). Only 8% of shoppers will pay with a check and just 3% will utilize mobile payments.
Data threats don’t seem to be impacting customers’ holiday budgets, as 40% of Americans plan to spend more than $500 this season. Meanwhile, 75% of holiday shoppers plan to do their shopping online, with 62% planning to shop via computer, and 30% planning to shop via a mobile device.
The same proportion of shoppers (75%) plan to visit a brick-and-mortar store. Whether they are brick-and-mortar or online stores, most holiday shoppers (63%) plan to shop at between one and five stores. Another 28% said they will shop at between six and 10 stores.
Sears Holdings poised to sell 140 properties
Sears Holdings has reached an agreement that will allow the retailer to sell an additional 140 locations.
Under terms of an agreement with the Pension Benefit Guaranty Corporation (PBGC), 140 Sears properties that were protected from being sold through a ring-fence agreement will be released in exchange for $407 million. Sears will use the funds for “financial flexibility” and to provide contributions to pension plans for the next two years, the company said.
"This agreement with the PBGC is another positive step forward which, upon closing, will provide our company with financial flexibility while supporting our commitment to honor our obligations to the associates and retirees covered by the pension plans," said Edward Lampert, Sears Holdings chairman and CEO. "While the lower interest rate environment has had a significant, unfavorable impact on the pension plans' funding, Sears Holdings has demonstrated its commitment to honoring this obligation."
Sears has to make a $37 million quarterly payment to the pension plans in December 2017. Following the $407 million contribution, Sears will be relieved of the obligation to make further contributions to the pension plans for approximately two years, aside from $20 million supplemental payment due in Q2 2018.
Through the closing of stores, the sale of assets, and the sale of the Craftsman brand, Sears said it has reduced the number of participants in the pension plan from 400,000 to 100,000.
The retailer also reported that it had total revenues of approximately $3.7 billion during the third quarter of 2017, compared with $5 billion in the prior year quarter, with store closures contributing to over half of the decline. Total comp store sales declined 15.3% during the quarter with Kmart store comp sales falling 13% and Sears comp sales decreasing 17%.
Sears also said that it expects to report a third quarter 2017 net loss between $595 million and $525 million compared to a net loss of $748 in the third quarter 2016.
Last week Sears Holdings announced that it was closing 63 more stores, including 45 Kmart locations.
Throwback Thursday: Marathon Man
The Nov. 22, 1982 issue of National Home Center News, the forerunner of HBSDealer, included this article under the headline “Blank runs in N.Y. Marathon.”
“Jogging chief executives may be in the vogue, but Home Depot president Arthur Blank takes his running seriously. Blank was one of 14,308 runners that spilled across the Verrazano Narrows Bridge in last month’s New York marathon, and went on to complete the 26.2-mile course in three hours 35 minutes.
“Blank, who first started running long distance about five years ago, says he was averaging 55 miles a week during the last few months before the marathon.
“‘It took a lot of training,’ he conceded, to complete the race.”
Appropriately, the slogan that appears on the home page of the Arthur M. Blank Family Foundation web site is: “There is no finish line.”
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RELATED CONTENT: HBSDealer’s own Jen Mosscrop, desk editor, completed the 2017 New York City Marathon on Sunday. Send her a note of congratulations here.
HBSDealer’s Throwback Thursday is sponsored by Schaffer Associates, a national management consulting firm specializing in executive search and organizational strategies for the hardware, home improvement, building materials, and consumer products industries. As the premier management consulting firm serving the industry, we help build organizations and leadership teams that foster corporate growth and success well into the future. Contact us at SchafferAssociates.com.