Few Americans Trust Online Data Safety

In specific, Gallup reports:

Consumers have more trust in the security of their information with some businesses or institutions than others. When asked how much they trust a list of nine institutions to keep their personal information secure, banks and credit card companies are the highest on the list, with 39% of consumers having a “lot of trust” in them. Following banks at a considerably lower level are health insurance companies (26%) and cellphone providers (19%). Given the rigorous data privacy provisions of HIPAA, Americans’ level of trust in insurance companies is surprising. Bringing up the rear are online retailers (6%) and social networking websites or applications (2%).

What is not clear is the effect this will have on companies like Amazon.com Inc. (NASDAQ: AMZN). Its sales soared 19% in the most recently reported quarter to $19.74 billion. Threats to that revenue include cyberattacks across the entire e-commerce industry in general, and more specifically the chance of a future hack of Amazon customer records. Amazon’s ability to take retail market share from the largest brick-and-mortar retailers, led by Wal-Mart Stores Inc. (NYSE: WMT), probably relies heavily on its position as a company that has had no had cybersecurity problems.

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Amazon’s problem is also a problem for the traditional retailers that need to transform themselves into ones that have a strong presence in e-commerce. Experts on the retail industry constantly press the point that companies, like Walmart that have flat same-store sales have little option for growth beyond their “dot-com” operations. While the success of these operations have been halting, an interruption of their progress would be extremely crippling.

Another hack like the one of Target’s accounts could cause consumers to draw back their e-commerce activity, and no retailer, whether it operates primarily online or is trying to push from traditional retail into online sales, can afford that.

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Methodology: Results for this Gallup poll are based on telephone interviews conducted April 23 to 29, 2014, with a random sample of 1,011 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.