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The retail sector is facing escalating cyber threats. According to VikingCloud's Retail Cyber Threat Survey, 80% of retailers experienced cyberattacks in the past year, and over half reported increased vulnerability. Key risks include understaffed teams and inadequate cybersecurity training, particularly among temporary employees, which heightens the potential for human error. Cyberattacks such as supply chain attacks, data breaches, and phishing continue to threaten both in-store and online transactions.
The implications of these attacks are severe, leading to business disruptions, financial losses, and damage to brand reputation. Many retailers resort to shutting down systems during breaches, and a significant number face declines in stock prices and regulatory fines. Moreover, a majority admit to underreporting incidents, risking customer trust.
Retailers will continue to be vulnerable: 52% report being at increased risk.
Retailers must recognize cyber vulnerabilities and protect their digital systems from cybercriminals looking to exploit them – every day. Here's what to know to make your retail business more secure.
The Leading Cyber Risks for Retailers
VikingCloud’s proprietary research identified the leading cyber vulnerabilities most likely to disrupt retail business operations:
- Strained Teams with Weak Links: Cyber workforce challenges remain a significant issue for retailers. 3 of the top 4 cyber challenges retailers report directly relate to an overextended workforce caused by employee shortages and turnover (50%), limited internal IT resources to keep up with modern-day cyberattack methods (52%), and the influx of temporary workers to keep up with seasonal demand (46%).
Human error is one of the leading causes of data breaches, often linked to inadequate cybersecurity training. The high turnover of retail employees means more people with limited awareness of internal cyber policies. In fact, VikingCloud’s research uncovered that 78% of temporary employees hired in Q4 of 2024 did not receive social engineering training, 56% lacked safe internet and social media usage guidance, and 56% did not receive mock email phishing training. Cybercriminals often attempt the easiest entry point - retail workers are a prime target.
Retail staffing vulnerabilities are compounded by a stretched internal IT team overwhelmed by the sheer number of cyber alerts to vet daily. The number one challenge retailers report is limited internal IT resources to keep up with modern-day cyberattack methods (52%).
Understaffed and underequipped teams create the perfect storm for retailers. And when the inevitable cyberattack happens, 12% of retailers report laying off employees because of financial impacts. That means even fewer resources with which to fend off the next cyber threat.
- Constant Exposure: In-store and online shopping is overwhelmingly at risk throughout the year. Payment card transactions continue to be vulnerable, with 52% of retailers reporting more at risk in Q4 of 2024 than at any other time over the previous 12 months.
Retailers face a wide range of cyberattacks with the potential to disrupt shopping, including supply chain attacks (52%), data breaches (48%), phishing attacks (32%), and denial-of-service (DoS) attacks (32%). The danger of a supply chain attack is a stark reminder of the importance of third-party visibility.
- Business Interruption, Financial Fallout, and Reputational Damage: Damaging cyberattacks shut down business operations so consumers can't buy products or services:
- 68%of retailers report that business downtime or operational disruptions are the most likely outcome of a cyberattack.
- 46% of companies reported that their first move upon discovering a breach is to shut down digital systems, including POS devices, to ensure the cyberattack doesn't spread.
The financial consequences of cyberattacks extend beyond daily operations. Approximately 23% of retailers experienced declines in their stock prices following an attack, while 33% faced regulatory fines due to failures in protecting customer data.
The effects of these cyberattacks can significantly harm customer trust and brand reputation. Following a breach, 53% of retailers report reputational damage, possibly leading customers to turn to competitors. In an effort to protect their brand image, 44% of retailers admit to withholding incident details from the public. This trend of underreporting and lack of transparency leaves consumers uninformed about potential risks, raising questions about whether brands are genuinely safeguarding their data.
Ensure Safer Retail Transactions with an MSSP
Retail companies should invest in advanced technologies and comprehensive training programs to combat the growing risks associated with cybersecurity to safeguard their revenue and brand reputation. However, retailers don't have to navigate this challenge alone. While they focus on delighting customers and meeting demand, VikingCloud's Managed Security Service can serve as an extension of their internal cybersecurity teams.
Managed Security Service Providers (MSSPs) offer various services, including threat detection, incident response, compliance management, and more. By customizing their services to meet the specific cybersecurity needs of retailers, MSSPs can help minimize downtime and financial losses. With specialized expertise, flexibility in packaging services within budgetary constraints, and access to top-tier technology, MSSPs provide an effective solution for leading retailers.
Strong cybersecurity is a crucial component of a retailer’s overall strategy. Enhance your cybersecurity framework with VikingCloud to ensure your business continues to operate smoothly in the face of sophisticated cyber threats.
Learn more about the cyber challenges the retail industry is facing and how an MSSP can help: Managed Security Services.
For more information about our Retail Cyber Threat Survey findings, check out our infographic: Hackers Aren’t Just Browsing: Retailers are Prime Target for Cybercriminals
