IBM: Retail top target sector for cyber-attacks in 2014

20 January 2015 Consultancy.uk

While the number of cyber-attacks in the US retail industry decreased significantly in 2014, the number of records compromised increased by 43%*, research by IBM shows. This data indicates that sophisticated cybercrime units are getting away with increased numbers of consumer records as their methods are becoming more efficient.

The biggest security issue facing retailers is no longer petty theft or white collar fraud, but protecting the transaction information of their online customers. Highly sophisticated cybercrime units are increasingly breaking into online stores and taking large numbers of financial and personal records. While large stores are becoming more aware of the threat, cyber criminals too are developing more sophisticated tools to break into customer records and take highly sensitive credit card details as well as other personally identifiable information on customers.

IBM Security, the security platform of IT-giant IBM, recently released its “2014 Retail Research and Intelligence Report” which aims at identifying a trend in the cyber threats the retail industry in the US faced in 2014.

 

Total Number of Retail Breaches Reported

 

According to the findings of the firm, the number of identified cyber-attacks dropped with 50% from its peak in 2012. The number of records stolen from retailers also decreased from 73 million in 2013 to 61 million in 2014, which is a decrease of 16.5%. The fact that the decrease in records stolen is significantly smaller than the decrease in cyber-attacks, suggests that while fewer breaches were reported in the last two years, these breaches were significant and wide-reaching in terms of victims affected. IBM states that this demonstrates the increasing sophistication and efficiency of cybercriminals.

Total number of retail records lost

When examining the data narrowed down to only incidents involving less than 10 million records*, this conclusion is increasingly strengthened as the number retail records compromised in these attacks increased by more than 43% in 2014 over 2013.

Total number of retail records compromised in breaches smaller than 10 million records

IBM concludes that despite the cyber threat slowdown (described as the decreased number of breaches), the retail industry emerged as a top industry target for cybercriminals, a trend the industry should respond to. “The threat from organised cyber-crime rings remains the largest security challenge for retailers,” says Kris Lovejoy, General Manager at IBM Security Services. “It is imperative that security leaders and CISOs in particular, use their growing influence to ensure they have the right people, processes and technology in place to take on these growing threats.”

* This excludes the top two attacks over the timeframe: Target Corporation and The Home Depot.

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Lack of high street openings sees UK retail in precarious state

11 March 2019 Consultancy.uk

Changes in consumer behaviour, particularly in favour of online shopping, are starting to take their toll on shop-fronts in the UK, while stagnant wages are hitting peoples’ willingness to go out for food and drink. As a result, the rate of closures is more than four times that for the same period in 2017, although largely reflecting of a lack of new openings.

The retail market has fallen under a cloud of uncertainty in the UK; consumer confidence has dipped, while wages have continued to malinger in negative territory. Retailers are also under pressure from disruptive technology, as consumer sentiment shifts to more online shopping and at-home leisure. While retailers have been able to weather the storm for the past years, transformations, low consumer spending and technology have begun to take their toll.

New analysis from PwC explores the current market conditions in the UK for retail shops, focused on net openings and closings. The market changes in the UK have seen the net closures to date hit 1,123 in H1 2018 across the UK’s top 500 high-streets. The rate of closures was considerably above openings for the first half of 2018, at 1,569 openings and 2,692 closures. Compared to H1 2017, more than four times as many shops closed than opened.

Openings and closures for retail industry

The study considered the most prominent areas to see a reduction in openings and net closures across the retail landscape. Overall, fashion stores were the hardest hit in absolute terms, with a total of 104 closures for H1 2018, followed by public houses and inns, which saw 99 closures in the same period. Electrical goods stores saw a net -44 decline, with a total of 8 openings for the period. Meanwhile charity shops were in a state of relative flux, with 80 openings to 117 closures. The firm notes that service sector shops, including estate agent, banks, recruitment agencies and travel agents, among others, too have begun the process of moving online.

Not all areas of retail saw closures, with coffee and ice cream shops seeing a small net increase in openings over all. Book stores – predictions of their total obliteration appear to have waned – saw a net 18 openings, while supermarkets drew the highest overall growth relative to closures, at 18 opened and 6 closed.

Regional figures for the UK

Not all areas have seen the same level of closures, with the Greater London area and the South East the hardest hit by the current wave of closures, at -268 and -197 net change, respectively, compared to -23 and -25 closures for the same period in 2017. The middle of England too saw considerable closures, with the West Midlands clocking a net -89, and Yorkshire and the Humber down -117 stores overall.

Commenting on the figures, Lisa Hooker, consumer markets leader at PwC, said, “Openings simply aren’t replacing closures at a fast-enough rate. Specifically, the openings across ‘experiential’ chains, such as ice cream parlours, beauty salons and vape shops, haven’t been enough to offset closures in the more traditional categories. Looking ahead, the turmoil facing the sector is unlikely to abate. Store closures already announced in the second half of the year due to administrations and CVAs already will further intensify the situation.”

Related: Artificial Intelligence offers $340 billion opportunity to retail sector.