Ensuring Cybersecurity in Retail Operations: Safeguarding Your Business

The retail industry has witnessed a significant shift towards e-commerce, driven by changing consumer preferences and increased demand. To meet these evolving expectations, retailers, including convenience stores, gas stations, automotive maintenance, car dealerships, restaurants, and coffee shops, have embraced online platforms and innovative services. However, along with these opportunities, they also face new cybersecurity threats. This article explores the importance of cybersecurity in retail operations and provides actionable best practices to mitigate risks and safeguard sensitive data.

The Growing Concern: Retail Cybersecurity Statistics

Retailers have always been attractive targets for cyber attackers and data thieves. However, in recent years, cybersecurity issues in retail have become an even bigger concern.

Consider the following recent retail cybersecurity statistics from 2020:

• Trustwave reported that retailers were targeted in 24% of cyberattacks, surpassing any other industry.
• According to BDO, 34% of retailers cited cybersecurity worries as their primary hindrance in transitioning to e-commerce.
• The same BDO survey revealed that 34% of retailers considered cyber attacks or privacy breaches as their most serious digital threat.
• Financial motives were the driving force behind 99% of cyber attacks in the retail sector, as reported by Verizon in 2020.
• Verizon also found that in the event of a data compromise, 42% of the compromised data involved payment information, while 41% was personally identifiable data.

Reasons behind Retail Cybersecurity Threats

Retailers collect, process, and store increasingly large amounts of customer data, including personally identifiable information (PII) and credit card numbers. While this data is valuable for enhancing customer experiences, it also attracts malicious actors seeking to profit from selling it on the dark web. Additionally, the adoption of cloud-based storage and mobile apps has expanded the data presence on the web, introducing new threat vectors. Retail businesses often operate in a hybrid environment, combining brick-and-mortar stores with e-commerce platforms, which creates unique cybersecurity risks.

Other cybersecurity issues in retail arise from:

• Cloud-based botnets
• Use of Near Field Communications (NFC) for payments
• Software vulnerabilities
• Lack of point-to-point encryption (P2PE) in Point of Sale (PoS) systems
• Use of insecure third-party plugins

To protect themselves and their customers, retailers must be aware of these threats and maintain a strong security team that understands and can anticipate possible attacks.

Retail Cybersecurity Challenges to Look Out For

As the retail industry continues to embrace digitization and e-commerce, the need for a robust cybersecurity strategy is more critical than ever. Let's explore the top cybersecurity challenges faced by the retail industry and how companies can address them.

Rising Threats

With the growth of e-commerce and digital marketing, the retail industry has become a prime target for various threats. Automated threats, including bad bot traffic, credential stuffing, account takeovers, gift card cracking, web and API scraping, fake account creation, and inventory scalping, have witnessed a significant increase. Third-party risks, insider threats, and social engineering attacks continue to pose substantial risks. Ransomware attacks, which can bring transactions to a standstill until a ransom is paid, are particularly concerning for retailers. In fact, retail ranked as the second-most targeted industry for ransomware attacks in 2021, with 77% of organizations surveyed experiencing such attacks. The adoption of Internet of Things (IoT) devices in the retail industry also introduces new cybersecurity risks, as hackers can exploit these devices to gain access to customer information.

Protecting Sensitive Data

Retailers store a vast amount of customer data, including personal information, credit card details, and purchasing history. This abundance of data presents a significant security risk, as cybercriminals view it as a valuable target. A data breach can have severe consequences for both the retailer and their customers. To protect sensitive data, businesses should employ strategies such as data encryption, network segmentation, identity and access management, zero trust, and automation integration into their security programs.

Balancing Security with Operational Efficiency

Retailers face the challenge of balancing robust security measures with operational efficiency. Security measures should not impede day-to-day operations or disrupt customer experiences. To achieve this balance, retailers can implement security solutions designed to seamlessly integrate with existing operations and workflows. Providing comprehensive training to employees is crucial to ensure their understanding of and compliance with security policies and protocols.

Types of Retail Cybersecurity Threats

To effectively protect retail operations, it is important to understand the types of cybersecurity threats prevalent in the industry:

Phishing Scams

Phishing attacks involve threat actors sending fake emails that mimic legitimate sources. Clicking on malicious links or attachments within these emails can lead to information theft or the installation of malware on systems.

Ransomware

Ransomware attacks exploit vulnerabilities in retailer networks, encrypting systems and demanding a ransom to restore access. These attacks can result in significant financial losses and reputational damage.

Data Breaches

Data breaches targeting retail operations aim to steal customer information, especially payment card data and personally identifiable information (PII). Hackers often use stolen credentials to disguise themselves as legitimate users.

Attacks on IoT Devices, Payment Systems, and Machine Learning Systems

The adoption of IoT devices and contactless payment systems introduces new cyber risks. Hackers can exploit vulnerabilities in these technologies to access customer data. Additionally, machine learning systems may be targeted by attackers deploying bots to harvest sensitive information.

Advanced Persistent Threats (APT)

Retailers with expanding digital footprints, cloud-based services, complex IT stacks, and geographically distributed networks face an increased risk of APTs. These threats can persist within systems for extended periods, often using email distribution to move laterally across networks.

Supply Chain Attacks

Retail operations relying on a network of vendors and partners face the risk of supply chain attacks. A vulnerability in a single vendor's access point can compromise the entire retail cybersecurity posture.

Retail Cybersecurity Best Practices

To ensure robust cybersecurity in retail operations, implementing the following best practices is crucial:

Encrypt All Sensitive Data

Sensitive data, including credit card numbers, should ideally not be retained. If retention is necessary, encrypting all data, whether at rest or in transit, is essential. Homomorphic encryption, which allows calculations on encrypted data, can strike a balance between privacy and usability.

Segment the Retail Network

Implement network segmentation to protect POS details, PII, and customer financial information. Network monitoring tools should be employed to detect signs of lateral movement, Advanced Persistent Threats (APTs), and breach attempts within each segment.

Perform Regular Data Backups

Regularly back up all data from e-commerce websites, POS systems, and other applications to minimize data loss in the event of a ransomware or phishing attack. Automating the backup process with the assistance of a Managed Service Provider (MSP) can enhance efficiency.

Deploy POS Malware Protection

Implement anti-malware solutions across the entire retail network, with specific focus on POS systems. Additionally, timely installation of security patches for all software and applications used by the company is crucial to mitigate vulnerabilities.

Implement Multi-Factor Authentication (MFA)

Implementing MFA adds an extra layer of security to protect customer data from phishing attacks and unauthorized access. It is important to select an e-commerce platform that complies with the Payment Card Industry Data Security Standard (PCI-DSS).

Implement Zero-Trust Access (ZTA)

Adopt a Zero-Trust Access approach that controls user and device identity and access. By adopting a "trust no one" philosophy, retailers can enhance their cybersecurity effectiveness.

Security Training

Insider threats have grown significantly in the retail industry, with compromised passwords being a common starting point for malicious breaches. Providing comprehensive cybersecurity training to employees, including password hygiene practices, is essential to prevent such incidents.

As retail operations increasingly embrace digitization and e-commerce, cybersecurity becomes a critical aspect to protect sensitive data and maintain customer trust. By understanding the evolving threats and implementing best practices, retailers can safeguard their operations and customers from cyberattacks. Compliance with relevant regulations, such as PCI DSS, GDPR, CCPA, and HIPAA, is vital to avoid legal and financial consequences. By prioritizing cybersecurity, retailers can thrive in the digital landscape while ensuring the privacy and security of customer information.