The Natural Evolution of Retail

  • Identity Verification

Our shopping habits have evolved. We used to make our rounds to the brick-and-mortar stores to fill our needs, stopping at multiple shops until we found the best deal. The Internet enhanced the process by adding unlimited pricing, reviews and shopping option data to the decision process. Mobile Internet has made price shopping as easy as a scan and search (and maybe even the final purchase). The National Retail Federation in a recent blog post describes the next shopping evolution as Store 3.0. In the NRFs scenario, we stumble upon an interesting item through media on our iPad, research the item, price shop, and then finally find it in stock at a local retailer. Thats pretty accurate.

They described to perfection my familys 2011 Christmas shopping process, except we never made it to a store. We made Cyber Monday purchases from our iPhones, Black Friday deals from our laptops, and last minute pleas from our tablets. It went smoothly, but I couldnt help but notice how easily retailers have made completing the next purchase. Apps and browsers store personal information. More times than not, I wasnt asked for any additional verification information to complete a sale. If the website didnt store my credit card and personal data, the browser did. Its evident that retailers are falling into the trap of believing what you have is the answer to who you are. How easy would it be for a would-be criminal with an unlocked device to visit a browsers history and order a new wardrobe?

Retailers need to adapt to Store 3.0 and the new types of fraud. Out of wallet questions are an easy and effective way to verify a customer. Yes, its possibly slightly more hassle for the customer, however Its significantly less hassle than arguing a fraudulent charge.

[Contributed by Jeff Davis, President and CEO]