Cyber security in retail: How proactive measures build trust and loyalty?
In today's digital landscape, cyber security is no longer a back-burner issue but a front-line concern, especially for retailers. The rise in cyber attacks, both in severity and frequency, underscores the urgency of robust cyber security measures. According to the Australian Cyber Security Centre (ACSC), there were 94,000 reports of cyber security incidents in FY23, translating to one report every six minutes. The retail industry was the second most targeted, accounting for 16.3% of all reported incidents.
As eCommerce continues its rise and consumer scrutiny intensifies, Australian retailers are ramping up their cyber security investments. In fact, according to SHOPLINE's Unified Commerce Benchmarking Study, which sought to understand how retail business owners and decision-makers are approaching 2024, 69% of retailers are prioritising cyber security as their primary technology investment for the next 12 months. This focus on cyber security investment is even more pronounced among larger businesses, with 89% of very large retailers—those with more than AUD$100 million gross value merchandising (GVM)—and 85% of large retailers, defined as those with GMV between AUD$50 million to $100 million, leading the charge.
Cyber security - a priority for retailers of all sizes
The sentiment towards cyber security varies a lot depending on the size of the business. Large retailers, with their massive digital footprints and vast amount of customer data, know just how disastrous a cyber attack can be. A breach can lead to major financial losses, serious reputational damage, and a long-lasting loss of consumer trust - even for the biggest brands. That's why nine in ten are focusing on the latest cybersecurity technologies and protocols.
Medium-sized retailers, whose GMV are from $10m to $50m, while not as resource-rich as their larger counterparts, are equally aware of the stakes. Thousands of these retailers built or grew their eCommerce presences during and since the pandemic, but for many, cybersecurity was an afterthought. Until now. SHOPLINE's report indicates that 85% of medium retailers are prioritising cyber security investments, emphasising the sector-wide recognition of this issue's critical importance.
Smaller retailers, defined as those with GMV of less than $10 million, often and wrongly assume that they're not at risk because of their size. Cyber attacks are indiscriminate and target vulnerabilities, irrespective of the size of the business. However, the impact on smaller retailers, who might not lack the expertise or resources to handle either a breach or the financial and reputational damage, is greater. So, these businesses face unique challenges; they must balance limited resources with the need to protect their business and customers online. Based on SHOPLINE's report, 38% of small retailers plan to increase their investment in cybersecurity, but that means the remaining chunk is exposing itself to risk and must be proactive. Adopting scalable and cost-effective security solutions can provide these businesses with essential protection without overextending their budgets.
The businesses who take privacy and security seriously, don't just reduce their risk, but better align themselves to contemporary consumers who are placing more scrutiny than ever on cyber security - or lack of it.
Building trust and loyalty
Investing in cyber security is not just about safeguarding against financial loss; it's also about building trust and loyalty among consumers. In an era where data breaches are headline news, and often, consumers are increasingly vigilant about their personal information. Retailers who demonstrate a proactive approach to privacy and data protection can differentiate themselves in a competitive market.
Transparency is a crucial component of this strategy. Retailers that are open about their data protection policies and the measures they take to secure customer information can foster a sense of security and trust. Communicating these efforts through clear, accessible channels helps reassure consumers that their data is in safe hands.
Moreover, adherence to regulatory standards and best practices in cyber security is imperative. Compliance with frameworks such as the General Data Protection Regulation (GDPR) or the Australian Privacy Principles (APPs) not only ensures legal compliance but also signals to customers that the retailer is committed to safeguarding their privacy.
Retailers who excel in this area often see a tangible return on their investment. Customers are more likely to remain loyal to brands they trust, and positive word-of-mouth can enhance the retailer's reputation, attracting new customers who prioritise data security.
As cyber threats continue to evolve, retailers must stay vigilant and continually update their cyber security measures. In today's digital age, where the retail landscape is deeply intertwined with technology, cyber security is essential for success. By prioritising cyber security investments and adopting a proactive approach to privacy, retailers can safeguard their operations and build lasting trust and loyalty with their customers.
