The retail industry faces unique challenges when it comes to risk management and cybersecurity. Many retailers have both a physical and online presence, resulting in a complex environment they need to defend and secure. This hybrid model is also present in their third-party ecosystem — retailers often leverage physical and online third-parties to sell their products, exposing them to even more risk that hackers are very much aware of.
The retailers industry is the most targeted by cybercriminals. Hackers continue to increase their attacks and target retailers, their sites, partners, and devices. Retail companies must make stronger investments in cybersecurity in order to account for this elevated risk. While it’s hard for security leaders to make the case for an in-house department, retailers can instead leverage XDR and MDR services for comprehensive cybersecurity and improved cyber resilience.
Retailers have been quick to leverage the cloud — their cloud adoption maturity rate stands at 78% compared to the 68% for companies in other industries and they’re seeing the highest revenue gains compared to other sectors. This increase in cloud-based infrastructure and digitalization has also brought on a wider attack surface and multiple endpoints that bad actors can exploit.
While most organizations have undergone a similar shift in infrastructure, retailers have unique challenges that set their risks apart.
Many retailers have both an online and physical presence, which are being exploited by hackers. There have been multiple instances of POS systems being hacked and compromised by malware, which has resulted in the breach of millions of customers’ personal and financial data.
Retailers have also increased their use of IoT devices - they’re using in-store beacons, bluetooth sensors, and even AR-equipped devices in order to improve the customer experience. The beacon technology market is expected to hit $56B+ by 2026 and is growing at a rapid CAGR rate of 59.8%.
While these tools are leveraging innovative technology, most of the time, they aren’t designed with the right security in mind and they might not be implemented in a secure manner, leaving the organization exposed. Attackers can either develop exploits to target the IoT devices directly or can make use of less secure connections across devices to infiltrate a company’s network.
Despite the focus on physical technology, retailer websites are still a prime target for malicious attackers and hackers. This is largely because retailers need to rely on third-parties in order to process payments and to provide key customer services like account creation, saving financial info, as well as loyalty programs and incentives.
This has led to the development of eCommerce SaaS providers which has helped streamline digital retail processes but have also led to a more focused point of retail cybersecurity risk that many hackers exploit. Magecart is a famous example of this — hackers use Magecart attacks to intercept payment processing and steal credit card data. They’ve also exploited zero-day vulnerabilities of various eCommerce solutions.
This change in organizational environment and threats retailers face requires a refreshed cybersecurity strategy as well as new technology and resources to manage it.
Over the last few years, the average retailers’ attack surface has grown across both digital and physical environments and many retailers haven’t had expanded budgets to grow their headcount in IT and security. While the instinct may be to start looking for various point solutions focused on cloud security, IoT security, and payment processing security and more, it’s not a tenable strategy.
Finding the right point solutions can be difficult in a crowded cybersecurity vendor environment and the resources it takes to bring on multiple vendors can be overwhelming and outright impossible for certain retailers. An organization would need a relatively large budget and enough employees in an IT or cybersecurity function in order to onboard, integrate, and utilize the solutions effectively. If there aren’t the right resources or teams available, a retailer may be stuck with too many vendors and not enough capabilities to realize any cybersecurity value from it.
However, retailers do have access to a new suite of cybersecurity tools and services to address this increased risk.
XDR is eXtended detection and response and is an evolution of EDR (Endpoint Detection and Response) and has become an available solution for organizations who need a more comprehensive suite of detection and response tools for a complex environment.
XDR tools expand traditional EDR telemetry sources and incorporate data from cloud-based, on-prem, and hybrid environments. They can come as single-vendor solutions serving multiple needs and often incorporate multiple sources of data in a centralized fashion in order to ensure that their entire attack surface is being monitored.
With solutions like XDR, retailers can rely on a single platform and vendor to detect any threat, anomalous behavior, or misconfigured asset and respond appropriately. With an elevated detection capability, retailers can significantly minimize the damage that can result from a potential compromise.
Managed Detection and Response services may be an alternative that some retailers may choose instead. This refers to a set of services that often outsource the management of cybersecurity solutions like XDR and EDR tools and place them in the hands of a fully-equipped cybersecurity team with 24/7 support.
Whether a retailer opts for an MDR solution will depend on the company’s available resources and whether they have any cybersecurity solutions or talent in place. MDR services are best for organizations who have little to no cyber resilience or infrastructure in place and have minimal talent devoted to cybersecurity.
Given how complicated cybersecurity is and how often it changes, having an in-house department can be difficult, especially if an organization is planning to expand and scale its cloud environment and invest in new technology. The cybersecurity talent shortage isn’t getting better. Between 2013 and 2021, unfilled cybersecurity jobs increased 350%.
MDR teams are always available and have the most updated training and information and can be relied on in case of an attack or when there’s a need for more cyber resilience as a result of any change in an organization’s environment.
Even with the best intentions and the best roadmap, having an environment and an organization that are cyber resilient against the most common and sophisticated threats is difficult. Knowing which solutions your organization needs often requires time and resources you don’t have and it’s likely that you don’t have a team in place to make use of all the different point solutions.
Your priority should be having some kind of cybersecurity infrastructure in place to minimize the amount of time you’re exposed, especially since retailers often have to account for cybersecurity risks across physical and digital environments. Retailers may be better served by leveraging XDR or MDR partners which will result in faster implementation and cybersecurity value.
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Josue Ledesma is a writer, filmmaker, and content marketer living in New York City. He covers cyber security, tech and finance, consumer privacy, and B2B digital marketing.View all posts
June 02, 2023
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