Innovation promises to enrich the retail customer experience. However retailers must meet rising challenges to deliver these experiences securely. At EKN Research’s most recent retail executive dinner, senior Marketing, IT, and Loss Prevention leaders discussed this delicate balancing act.
Let’s begin by recognizing customers on the endpoints of the security/experience continuum:
- “I’ll Tell You Everything” – This customer craves the experience and emotional connection that comes with shopping at her favorite retailer. She rarely, if ever, thinks about security – expecting that someone else has it covered. She is trusting…especially with her favorite brands. Her expectations are high and
,she demands relevance and service in exchange for her continued trust.
- “I’m Not Giving You Anything” – She pays in cash and won’t join your loyalty program. She’s disabled location services on her phone and doesn’t post to social media. She craves her privacy. Maybe she’s been burned before or perhaps she’s read about one breach to many. She won’t compromise privacy to get a better customer experience.
In reality, most customers fall between these two extremes – so retailers must consider both.
Now, let’s try to wrap our heads around the pace of innovation. New brands, concepts, products, services and experiences continuously evolve across web, mobile and store channels. The buzz from business and technical ideas is constant –personalization; customization; wearables; IOT; cloud; and more potential 3rd party partners and vendors than you can count! The rise of analytics and data-driven decision-making elevates the need to harden data security and integrity more than ever.
External security concerns (many beyond a retailer’s direct control) include POS or credit card breaches, denial of service attacks on a retailer’s systems (or those of partners), competitive espionage, social or political activity, and more.
Insider threats can be just as dangerous – shrink, leaks of sensitive non-public financial data, or the usage of unsecured technologies outside of corporate firewalls. And unfortunately physical security of both stores and home office locations for active shooter scenarios are now commonplace.
The risk environment can seem daunting!
But retailers cannot go into a shell and wait for these storms to pass. The pace of change and the need to stay relevant (and profitable) requires balance. How does one maintain the appropriate level of security while at the same time implementing new ideas and experience to engage customers?
It starts with ensuring a culture of partnership. Loss Prevention and Security cannot be effective operating within a “cafeteria culture” – one where they are lucky enough to overhear about potentially risky initiatives while in line at the salad bar. These groups need to establish their position as a trusted advisor, where they are brought into the risk evaluation process up front to effectively articulate the risk probability and range of outcomes.
Here are a few more practical suggestions for maintaining this delicate balancing act:
- Don’t collect or retain more data than you need. Extraneous information doesn’t help and if breached, only increases downside risk.
- Establish more than a purely subjective evaluation. Perhaps you’ve had a past event with a known financial impact that you can reference – or create a quantitative model that can predict ranges of potential outcomes.
- Understand your customer and your culture and use them to define your risk appetite. Value the expertise from all perspectives, but also ensure clear decision-making authority and accountability.
Finally, ensure that the memorable customer experiences that you create are positive – you’ve either delivered on the emotional connection and needs of your customers or you’ve effectively avoided serious risks.
And of course, keep your balance to avoid ending up on the front page for the wrong reasons!
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