We’ve seen an alarming increase in cyberattacks targeting retail companies in recent years. For example, Hot Topic’s breach of 350 million customers’ data made headlines as the biggest retail breach to date. Unfortunately, this incident isn’t isolated. Breaches are happening more frequently and are growing in severity. Here’s what you need to know to keep your customer data safe.
Data Security in Retail
Why are retailers so vulnerable? Most retail companies now operate online. While this improves customer accessibility and convenience, it also opens up more entry points for attackers. Add to this the massive volumes of data that merchants handle on a daily basis, and you have the perfect target for cybercriminals.
Furthermore, retailers have always been a lucrative target because the data that they traffic is extremely valuable to hackers, including everything from customer credit card details to personal identification data. A single breach can yield a treasure trove of data, which hackers can then sell on the dark web or use for identity theft and fraud.
Unfortunately, many retailers still rely on outdated technology to protect that data. These systems were designed long before the rise of today’s complex attacks and are highly vulnerable. Even though some retailers are updating their infrastructure, many critical systems remain stuck in the past, exposing them to hackers.
Retailers also often work with multiple external suppliers, from payment processors to delivery partners. Every third-party connection creates another potential entry point for hackers. As a result, bad actors are increasingly exploiting supply chain vulnerabilities in retail.
Related story: Future-Proofing Retail: Top Cyber Threats to Watch in 2025
Protecting the Data Itself
Faced with so many threats, retailers need to protect themselves from breaches that could damage the reputation of their brands and even open themselves up to lawsuits.
First, retailers should shift away from a strategy that focuses on exclusively protecting the perimeter of their networks through firewalls. With advanced cyber threats, it’s clear that no firewall is impenetrable. Retailers now need to focus on securing the data itself rather than just the boundaries.
One method retailers can use is tokenization, which works by substituting sensitive data (e.g., a credit card number) with a randomly generated token that has no exploitable value outside of the system. If a breach should occur, these tokens are meaningless without access to the system that maps the tokens back to the original data.
Another method is encryption, which involves encoding data so that it becomes unreadable without the correct encryption key. Encryption algorithms transform data into complex codes, and only authorized users with the proper key can decrypt and access the original information.
Also, retailers should implement strict access controls. Not every employee or vendor needs access to all areas of the system. By implementing strict needs-based access controls, retailers can minimize the risk of insider threats or unintentional data exposure. The fewer the number of people who have access to sensitive information, the less risk of a breach.
Finally, retailers must invest in real-time monitoring tools. These systems can detect suspicious activity the moment it happens, allowing for a swift response. In an industry as fast paced as retail, in which customer transactions occur every second, being able to react in real time can make the difference between containing a breach and a full-scale crisis.
From Reactive to Proactive
Retailers can no longer afford to take a reactive approach to data security. A data-centric approach, focused on tokenization, encryption, access controls, and real-time monitoring, is the best way to safeguard sensitive customer information and protect your brand from the devastating effects of a breach.
Aidan Simister, CEO and co-founder of Lepide, a platform that brings together data and identity security.
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Aidan Simister, CEO and Co-Founder, Lepide
Aidan is the CEO and co-founder of Lepide. Having worked in the IT industry for a little over 22 years in various capacities, Aidan is a veteran in the field. Specifically, Aidan knows how to build global teams for security and compliance vendors, often from a standing start. After joining Lepide in 2015, Aidan has helped contribute to the accelerated growth in the US and European markets.