Target Sees Strong eCommerce Growth as Security Fears Fade

Target told investors that their digital channel has become a more vital component of their sales growth as digital’s contribution to their sales doubles year-over-year in the last three months.

The strong growth in digital sales surprised investors, causing the stock to skyrocket, rising about 4.5% overnight on the news.

Previously, investors smelled risk on Target because the company saw an insane amount of personal information stolen from Target’s servers back in 2013.

According to Target, 70 million personal records and 40 million credit and debit card numbers were stolen. The breach forced the company’s then CEO, Gregg Steinhafel, to step down earlier this year. The company’s stock dipped a couple of times in 2014 as more investors worried that Target had lost its eCommerce potential.

Liron Damri, COO of Forter, comments, “The one segment of this ecosystem that was truly hurt by the latest breaches is the online retailers. They are being held accountable for any case of fraudulent use of stolen information even in cases where the data breach was in Target’s database. In such cases, they will be asked to pay the full amount back to the buyer, whose credit card details were stolen, and will be facing rising costs of fraud related costs. Every merchant who’s dealing with card not present transactions has to build his own fraud prevention system in order to fight the chargebacks.”

Those fears are over.

Now, Target is crowing not only about their strong digital sales growth, but about the potential of eCommerce and mCommerce to grow in-store sales. On their earnings call, Target management emphasized that they are making their in-store, eCommerce, and mCommerce initiatives work together. “As we plan for the future, we will take a channel-agnostic view of our growth allowing our guests to interact with us where and when they want, online, in stores and on their mobile device,” said Target’s new CEO, Brian Cornell.

Despite investor fears, the security breach hasn’t affected consumer behavior. According to the Department of Commerce, eCommerce in the United States rose 16.2 percent year-over-year in the third quarter of 2014.

More people are buying online than ever, no matter what the hysterical headlines about security breaches might say.