Business is booming and data is flowing. Retailers and shoppers are leveraging and enjoying many benefits data sharing brings: loyalty programs, personalized experiences, easier product location and ordering, online shopping, mobile access and the list goes on. With a few clicks, even hard-to-find products make their way to a customer’s doorstep within hours. However, this shopping ease and bliss also unintentionally opens up some risks that could be avoided.
It also only takes a click for a customer to be gone. Competition is one of many challenges retailers face and while that’s nothing new, the data-driven approach online and brick-and-mortar merchants use today is evolving quickly with transformative technology capabilities. Unfortunately, this results in retailers as a top target for cyberattacks. According to the 2019 Thales Data Threat Report – Retail Edition, nearly two thirds (62%) of U.S. retailers reported experiencing data breaches, with more than a third (37%) occurring in the past year.
Interestingly enough, the study found that despite the high rate of data breaches retailers face, only 62% of respondents said they were increasing security spending this year compared to 84% last year. This decline comes even as nearly all (96%) of the retailers surveyed claimed they use sensitive data within digitally transformative environments. While U.S. retailers are leaders when it comes to digital transformation, the lower rate of spending as well as the use of sensitive data in a multi-cloud environment contribute to the vulnerabilities for the retail industry.
The Perfect Storm
In addition to unique personal preference and product selection data, sensitive customer payment information must be shared and stored to facilitate transactions. And herein lies another big challenge for retailers: payment and personal preference data resides inextricably together creating a “perfect storm” in the event of a cyberattack. With these two types of data inevitably connected, it creates a valuable target for hackers and fraud that might be committed can be much more difficult to detect.
The report also revealed that complexity is perceived as a top barrier to data security — a likely cause for the extremely low data encryption rates among retailers: less than 36%. Despite recognizing the importance of protecting sensitive data, the majority are simply not doing all they can to control unauthorized access. Retailers must encrypt everything — not just payment or customer preference data. Everything.
Here’s some really good news: data security doesn’t have to be hard, and it’s a great way to offer outstanding service after the sale, a key to customer loyalty. Excellent customer service doesn’t happen by accident — it’s carefully designed. By partnering with a company that provides robust end-to-end encryption security that serves as a business enabler, retailers can focus on providing great products, protecting their brand, and staking a claim to the more than $3.8 trillion (and rising) estimated in retail sales. As the holiday shopping season approaches, security cannot be an afterthought.
For more key findings, download the 2019 Thales Data Threat Report – Retail Edition and join our upcoming webinar, “The State of Data Security in Retail” on Thursday, Oct. 10 at 2:00 pm ET. Click here to register.