Retail Businesses: Top 5 Cyber Attacks
Retail businesses face unique cybersecurity risks compared to other high-vulnerability sectors. Major retailers are highly public-facing and can easily become front-page news in case of a cyberattack. A study shows that nearly 35% of consumers say they will stop shopping at a company entirely if they find out a breach has taken place there. In this article, we highlight five of the most common cybersecurity threats to retail companies: phishing scams, stolen customer information, attacks on IoT technologies, supply chain attacks, and ransomware. We discuss the potential cost and collateral damage of each threat and offer prevention strategies, including investing in endpoint security, cybersecurity training, routine vulnerability scanning, and SOC as a service. Protecting your business from these threats is essential to maintaining public trust and the health of your company.
It’s common knowledge that cybersecurity breaches erode public trust in retail businesses. According to one study, nearly 20% of consumers say they’ll stop shopping at a company entirely if they find out a breach has taken place there. With numbers like that, learning about common cybersecurity threats to retail companies and how to prevent them is vital to the health of your business. Below, we’ve outlined 5 of the most common and provided examples.
Phishing Scams
Phishing scams are a common occurrence and affect businesses in every industry. The retail sector is the primary target of these scams worldwide. Phishing messages are typically sent via email or text, and their aim is to trick unsuspecting individuals into revealing sensitive information.
Phishing emails may appear to come from legitimate sources such as vendors, partners, investors, or even customers. The messages may ask for sensitive information or encourage the recipient to click on a link, which can result in HTTPs phishing. This leads to a page that downloads malware onto their devices, allowing hackers access to their data.
Cost: The cost of phishing scams is high, with the average large organization losing nearly $15 million each year.
Collateral damage: Additionally, phishing can result in a loss of proprietary information and disrupt business activities. High-profile cases can also cause significant damage to a company’s reputation.
How can it be prevented? Investing in endpoint security is one of the best ways to protect your network against phishing attacks. Many phishing scams aim to infect access points to your network with malware. Endpoint detection and response protection allow you to isolate compromised devices and prevent the spread of malware.
Stolen Customer Information
Hackers can cause serious harm to businesses by using stolen customer information to pose as legitimate customers and request sensitive financial details such as payment card data. This tactic is becoming increasingly common and can be difficult to detect, as the hackers are using authentic customer information. In addition to posing as customers, hackers may also use credential stuffing to gain access to retail networks, making it vital for businesses to have strong threat detection and response measures in place. To protect against phishing attacks, businesses should educate their employees on how to spot suspicious emails and phone calls, and encourage them to report any suspicious activity. Additionally, businesses should implement two-factor authentication and other security measures to protect customer data and prevent unauthorized access. By taking these steps, businesses can help protect their customers and safeguard their own financial interests.
Cost: Data breaches can result in costly class-action lawsuits for retail businesses, as seen with T-Mobile’s $350 million settlement for compromising personal data of 80 million customers. In addition to legal fees and settlements, breaches can harm a business’s reputation and customer trust.
Collateral damage: Data breaches can cause severe reputational damage to businesses, even if they successfully defend themselves against class-action lawsuits. The widespread leak of customer information can lead to scrutiny from major media outlets, which can damage a business’s relationship with its customers and linger for years to come. The impact of a data breach on a company’s reputation can result in a loss of customer trust, decreased sales, and difficulty in attracting new customers.
How can it be prevented? Businesses can prevent data breaches by providing cybersecurity training to employees with access to customer information, conducting routine vulnerability scans, implementing two-factor authentication, using encryption for sensitive data, and updating software and security systems regularly.
Attacks on IoT Technologies
The use of wireless and contactless technology in retail transactions has increased significantly since the COVID-19 pandemic. While contactless payment methods like Square Terminals provide convenience and promote public health, they can also be vulnerable to cyberattacks. For example, in 2020, researchers found that Verifone and Ingenico Point of Sale devices were susceptible to malware that could steal payment card information from customers in under 10 minutes.
Cost: The potential cost of a widespread cyberattack on the IoT devices used by retail companies for payment processing is difficult to estimate. The annual value of transactions made through mobile Point of Sale (PoS) systems was around $2.88 trillion in 2022.
Collateral damage: When Point of Sale (PoS) systems are compromised, it can disrupt business operations and lead to a loss of public trust. In addition to eroding customer trust, these hacks can also halt sales.
How can it be prevented? Endpoint protection services can significantly reduce the vulnerability of IoT devices, including Point of Sale (PoS) systems, to malware attacks. In addition to endpoint protection, businesses can also benefit from Security Operations Center (SOC) as a service. This service enables businesses to supplement their in-house cybersecurity team with assistance from vetted third-party experts. By investing in these cybersecurity measures, businesses can enhance their security posture, reduce the risk of cyberattacks, and protect customer data.
Supply Chain Attacks
Hackers are targeting vendors in the supply chains of retail companies to gain access to their networks and ultimately attack the main target. This can unintentionally impact other retailers in the supply chain, as seen in the example of a Toronto cannabis store that lost thousands due to a cyberattack on its logistics company in August 2022. Even though the retailer was not the intended target, the attack disrupted its operations. It is important for businesses to prioritize cybersecurity across their entire supply chain to prevent these types of attacks.
Cost: Recent research shows that global supply chain issues cost companies $184 million annually, with a significant portion attributed to cybersecurity breaches.
Collateral damage: Supply chain attacks can not only have significant up-front costs, but they can also easily damage your business’ relationships with partners and suppliers.
How can it be prevented? Having a robust and consistent incident response process can help you respond to supply chain attacks quickly and mitigate the damage they’re able to do.
Advanced Persistent Threats (APTs)
APTs are different from other attacks because they require sustained access to a company’s network and are conducted by well-resourced groups with the intention of stealing information over time. Large retail corporations are prime targets, and as they rely more on cloud-based services and complex IT stacks, it becomes increasingly difficult to identify and respond to these attacks effectively.
Cost: On average, a successful attack by a group like APT38, which specialises in these types of attacks, results in damages worth over $41 million.
Collateral damage: APTs can be compared to a disease that slowly spreads through an organisation’s network, causing widespread damage over months or even years of infiltration.
How can it be prevented? By offering swift and ongoing identification, detection, and resolution of security alerts, managed SIEM solutions can increase the likelihood of flagging and dealing with APTs before the threat actors behind them can complete their work.
