Resilience is crucial in retail, subject as it is, perhaps more than most sectors, to the twin pressures of rapidly evolving competition and corresponding consumer demand. As the sector continues its digital and technological transformation, it’s essential for retailers to channel the same determination that saw them through the pandemic into navigating the ever-shifting terrain of cyber risk—and not just during the holidays.
In this post, we'll discuss the primary factors that challenge retailers to establish effective cyber security programs and describe the measures they can take to strengthen their cyber resilience and protect their businesses.
Grave new world
The advent of next-gen retail platforms, mobile technologies and e-commerce has transformed the shopping experience. But alongside these advancements has come an increase in potential entry points for cyber attacks. While a certain degree of shoplifting and other conventional loss risk remains, retailers now face the additional cyber risk of ransomware, denial-of-service attacks, phishing scams and insider breaches.
What's more, as the retail ecosystem incorporates cyber tools to stay competitive, cyber attack vectors have opened throughout the entire supply chain. Retailers must acknowledge that every online service and digital touchpoint presents a potential vulnerability that malicious actors can exploit.
But establishing robust cyber security programs is not without its challenges. Consider the following:
Multiple points of attack: The days of simple cash transactions are fading away. Today's shopping experience involves myriad interconnected technologies: apps, scanners, telematics, Wi-Fi systems and more. Inadequately secured, these technologies can all serve as entry points for cyber attacks.
Workforce dynamics: The retail industry is known for its high turnover rates, particularly in customer-facing roles. This constant churn makes it hard to ensure that cyber training and best practices are consistently implemented across the workforce.
Legacy systems: Many retailers still rely on older technologies to manage their backend operations and frontline transactions. These legacy systems are often difficult to upgrade, leaving them vulnerable to contemporary exploits. As businesses grow, their digital networks become a patchwork of systems that are harder to visualize and monitor, making it easier for cyber attackers to breach their defenses.
Data exposure: From loyalty apps and digital wallets to gift cards, debit machines and online sales, retailers are collecting a wealth of data from an expanding range of sources. While this data is critical for enhancing the customer experience, it also exposes them to significant financial and reputational risks if they fail to protect sensitive information adequately.
Unbalanced investments: Retailers have been investing heavily in digital transformation, but cyber security investments often fall short. Inadequate security controls, training and incident response plans can leave businesses vulnerable as they embrace digital innovations.
Although the road to cyber resilience may seem rocky, retailers can firm up their footing with the following steps:
- Map your attack surface: Conduct a comprehensive assessment of your retail technologies to identify potential vulnerabilities and understand how cyber attackers could impact your business. Monitor all digital touchpoints, including mobile devices, online channels, point-of-sale systems, back-office platforms, partner ecosystems and supply chains.
- Understand supply chain dependencies and risks: Assessing the risk of the interconnections and relationships between various suppliers, manufacturers, distributors, and customers—as well as identifying potential vulnerabilities and disruptions that could impact the flow of products and services—allows for the organization to be more resilient in the event of a cyber incident.
- Close the investment gap: Ensure that investments in cutting-edge retail technologies do not overshadow investments in cyber security, data protection and regulatory compliance. Strive for a balanced approach that prioritizes security alongside innovation.
- Stay diligent with training: Despite workforce turnover challenges, make cyber security and resilience training a priority. Supplement training efforts with simulated tabletop exercises to help leaders practice incident response strategies and refine their capabilities.
- Prepare for the worst: Develop a robust cyber attack response plan. Define your initial response, your mitigation strategies, your key contacts and the measures you’ll take to prevent future attacks. Cyber resilience is about being prepared, and swift in your response.
- Consider cyber insurance: The maturing cyber insurance market offers specialized products that provide guidance and peace of mind, adding an extra layer of protection to your business.
Even the smallest step makes a difference. Adaptability is key. And with the right strategies and support, retailers can reach cyber maturity and outmaneuver modern business risks. Prioritizing cyber preparedness will not only help safeguard businesses but also protect customers and help to preserve the entire sector’s reputation for value, innovation—and resilience.
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