The retail industry is undergoing a digital transformation, driven by changing customer expectations, omnichannel strategies and eCommerce platforms, with security risks evolving just as fast. Risks such as data breaches, downtime, organized retail crime and return fraud, and supply chain disruptions can damage customer trust, brand reputation and revenue streams, as well as incur fines and legal costs.
Read on to find out more about retailers’ evolving security landscape—and how to adapt to it.
Threats Against Retail Resilience
In retail, the customer is king, and modern customers expect seamless, personalized and secure shopping experiences. However, this is easier said than done. The pace of innovation and the meteoric rise of online shopping come with a slew of security challenges that could negatively impact the customer experience and thus retailers’ brand reputation, customer retention and ultimately their bottom line.
Creating a culture of security to prevent and quickly respond to incidents is key. Considerations include:
Threat landscape awareness: Cyberattacks are becoming more sophisticated, frequent and targeted, aiming to disrupt operations, steal data or extort money. Retailers need to be proactive and vigilant in detecting and blocking threats before they impact their business. For example, attackers often target retailers during seasonal and holiday shopping windows, threatening retail operations during the most lucrative times of the year. Attackers have also been known to target suppliers or vendors to cause a cascading effect on the entire retail ecosystem.
Regulatory repercussions: Retailers handle sensitive information from customers, partners and employees, such as personal data, payment details and loyalty programs. They also need to comply with various regulations and standards—such as PCI DSS, GDPR and CCPA—that govern how they collect, store and process this data. Tracking and adapting to changes in the regulatory environment is necessary to prevent fines and protect customer trust.
Personalization, payments and the omnichannel experience: Customers expect fast, convenient and secure shopping experiences from retailers, whether online or in-store. They also want to know that their data and transactions are protected from misuse. Retailers need to secure access to confidential data as well as securely leverage that data for tailored shopping experiences. It’s also necessary to protect the entire omnichannel ecosystem, including eCommerce platforms, POS systems and mobile apps and legacy systems from vulnerabilities and exploits.
eCommerce crime, fraud and shrinkage: It’s projected that eCommerce will account for ~25% of total retail sales by 2030—a significant increase from 15% in 2021. Online marketplaces will likely proliferate as a result, which organized retail crime (ORC) groups can exploit to profit from stolen goods. eCommerce return fraud also poses a significant threat, contributing significantly to physical shrinkage (i.e., inventory losses from theft and errors). With the National Retail Federation (NRF) reporting $94.5 billion in retail shrink in 2021 alone, it’s clear that security measures must evolve with consumer shopping habits to protect retailers’ bottom lines.1
Provide Peace of Mind to Lock Down Loyalty
To deliver seamless, personalized and secure shopping experiences, retailers need a trusted partner that can help them navigate the dynamic threat landscape. Lumen offers comprehensive security solutions and expert guidance to help retailers safeguard their customer experience, protect their confidential data and manage threats. For example, Lumen can help provide:
- Business continuity even in the face of cyberattacks with solutions backed by advanced threat intelligence and actionable insights. We have one of the largest, deeply peered IP backbones in the world, providing unique visibility into new and emerging threats across the globe. Our Black Lotus Labs team monitors and disrupts threats daily, to help your sites, apps and systems stay up and running. In fact, Lumen increased proactive monitoring for a major clothing retailer by aligning with our application edge SOC teams to monitor the health of the application environment and share best practices and critical threat intelligence.
- Strong brand reputation and customer trust by helping you avoid regulatory risks across digital, mobile and physical environments. Our experts can help you design and implement data and app protection policies, practices and tools that provide confidentiality, integrity and availability. We also offer encryption, access control, monitoring and audit solutions that help you comply with regulatory requirements and demonstrate accountability.
- A competitive edge with highly adaptable solutions like secure access service edge (SASE) and zero trust network access (ZTNA) that can help you innovate quickly knowing your data, IP and hybrid environments are protected from the edge to the cloud. We have a proven track record of helping retailers secure their brand and data, such as the major clothing retailer that we protected with our next-generation application edge compute firewalls.
In conclusion, retailers face numerous cybersecurity challenges as the landscape evolves. With smaller security budgets and increasing pressure to deliver exceptional omnichannel customer experiences, retailers must adopt innovative, cost-effective technology solutions to mitigate risks. Lumen is your trusted partner to securely navigate digital transformation and help deliver elevated shopping experiences that build customer trust.
Learn more about how we can help protect your business today.
1National Retail Federation (NRF), Organized Retail Crime: An Assessment of a Persistent and Growing Threat, Nov. 29, 2023.
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