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Retail Hacks on the Rise

With Retail Hacks on the Rise, Fashion Cannot Ignore Cyber Security Risks

Amazon is facing cyber security concerns after hackers targeted third-party sellers on the e-commerce platform to post fraudulent listings and steal money directly from some accounts, according to a recent report by The Wall Street Journal.

In recent weeks, hackers are said to have changed bank deposit information on Amazon accounts of active sellers to redirect payments and claim tens of thousands of dollars from each. They have also infiltrated Amazon accounts of inactive or infrequently active sellers in order to post nonexistent merchandise at steep discounts in an attempt to defraud buyers.

While the full extent of the recent bout of Amazon hacking is “still unclear,” it sheds light on the need for companies to safeguard confidential consumer data (such as customers’ social security, credit card and bank account numbers) and other valuable information, particularly given consumers’ increasing reliance on e-commerce.

Not only are brands faced with legal requirements when confronted with a cyber hack, they must preemptively consider the damning results that such an event could have on their existing consumer base and potential new customers given the bad press that would certainly come hand-in-hand with such an attack.

Last year, as part of its annual Consumer Loss Barometer report, KPMG – a global network of professional firms providing Audit, Tax and Advisory services – revealed that 19 percent of consumers would abandon a retailer entirely in response to a hack. Another 33 percent said that fears that their personal information would be exposed would keep them from shopping at the breached retailer for more than three months.

As for Gen Z shoppers, in particular, those whose birth years range from the mid-1990s to early 2000s, “Fifty-nine percent [said they would] avoid shopping at retailers that have been [affected] by security breaches,” according to Interactions Marketing’s report, “Retail Perceptions: The Next Generation of Retail.”

Not just a problem for large organizations, such as TJX Companies, Target, Neiman Marcus, and Yahoo!, which have all experienced breaches, smaller companies are increasingly being targeted. A recent report by Symantec, an American software company, entitled, “Internet Security Threat,” detailed the state of threats across an array of industries, noting that retail was the industry sector most heavily exposed to email phishing attacks in 2015. Additionally, it found that the retail sector had the highest rate of malware in 2015, with more than one percent of emails classified as malicious.

KPMG advised companies to think about cybersecurity less as an IT-managed risk and more as a strategy issue, "Branding, loyalty, sales, overall customer relationships and business agility all hang in the balance.” Shawndra Hill, a senior researcher for Microsoft, says brands – and individuals – would be wise to “always assume your data can show up somewhere.”

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