Spend, spend, spend online

News Analysis

Spend, spend, spend online

Online sales are spectacularly bucking the high-street retail slump, but consumer concern over security is preventing even greater success.

Monthly sales volumes grew 4% in July, which equates to a yearly increase of almost 90%, according to TradeDoubler's monthly analysis of internet sales. The value of these sales rose 6%, while the value had dropped slightly in same period in 2004.

This good news is tempered by consumer fears over security of a range of online transactions, including retail, securities trading, banking and auctions. More than four-fifths of the 8,000 consumers surveyed recently by RSA Security and LightSpeed Research felt threatened or extremely threatened by online fraud and identity theft.

Companies should combat the fear factor by stronger methods of authenticating customers and being more open about their spending on information security.

"Consumers clearly want to stay active online, but they have effectively thrown down the gauntlet for the banks, brokerages, web email services, auction sites, and myriad other businesses to whom they entrust their personal information," said Chris Young, vice president of consumer authentication services at RSA Security. "These account providers are therefore facing an extraordinary business opportunity."

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