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Retailers ‘struggling to balance customer experience with IT security’

 960 640 Stuart O'Brien
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Retailers are struggling to balance the challenges of delivering increased footfall, bigger basket sizes, and an enhanced customer experience with their fundamental technology and IT security needs.

That’s the conclusion of a survey conducted in May 2019 at RetailEXPO 2019 by Cybera, which revealed that offering a differentiated customer experience (31 percent) and increasing footfall (28 percent) are the biggest challenges for retailers.

In addition, another recent report showed that poor customer experiences cost British retailers up to £102 billion in lost sales each year.

Retailers are well aware of the need to positively differentiate themselves, with 83 percent of respondents in the Cybera survey citing that delivering an enhanced in-store customer experience is very important.

Cybera says the key to addressing all these new challenges is additional applications and services, the majority of which will rely on secure, stable, and scalable network technology. However, nearly one quarter (23 percent) of the respondents have not introduced additional services to their stores in the past 12 months.

The primary inhibitors included cost—25 percent said they thought it would be too expensive—followed by IT security concerns (19 percent) and a belief that their network would not support additional applications (14 percent).

Moreover, many retailers noted the ever-evolving regulatory landscape—including GDPR, PCI, and the upcoming PSD2—as an added distraction. Nearly half (47 percent) said they were concerned about new regulatory demands, admitting it was time to review their technology and processes.  

Interestingly, less than 10 percent considered IT security to be a key business challenge. This is particularly startling compared to the findings of the British Retail Consortium’s annual crime survey, which found that members are generally seeing a growth in the number of cyber-attacks, continuing previous years’ patterns. Nearly 80 percent of respondents in that survey said the volume of cyber-attacks and breaches had increased in 2018 over the previous year.

Cybera SVP and GM EMEA, Hubert da Costa, said, “Retail technology and customer demands are constantly changing, but one thing that will always be critical is customer experience. The growth of IoT in retail is staggering and it threatens the ability to deliver a consistent, high-quality customer experience. All of these network-enabled devices are disparate, which means separate management and requirements. This IoT growth is challenging for retailers—many of whom operate remote, smaller-footprint sites managed by a staff with limited IT expertise. The solution is to leverage a network platform that enables them to deliver these new breakthrough apps and services quickly, easily, and without compromising their security.”

Hiscox reveals results of staged ‘real world’ Brompton cyber attack

 960 640 Stuart O'Brien
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Hiscox recently collaborated with iconic bike manufacturer Brompton to stage a ‘real world’ cyber attack, simulating the effects by constructing a complete clone of Brompton Bicycle’s east-London store overnight, hiring ‘staff’ and stocking shelves with counterfeit merchandise.

The fake store, called ‘3rompton,’ opened its doors to the public on the opposite side of the road and subsequently launched a series of cyber attack simulations on the genuine Brompton store in Shoreditch, with reactions of staff and passers by captured on video (https://www.youtube.com/watch?v=Y1b8865GOHU&feature=youtu.be).

Common hacking techniques such as ransomware and phishing were brought to life through a series of simulated offline attacks; the real store was boarded up, displaying a ransom note demanding Bitcoin in exchange for re-entry; genuine stock deliveries were diverted to the fake ‘3rompton’ store, highlighting the potential effects of a phishing scam; finally the real Brompton store was flooded with imitation customers overwhelming staff, simulating a denial-of-service (DDoS) attack.

According to the insurer, one in three (33%) UK small businesses have suffered a cyber breach and this simulation is the latest initiative in its cyber awareness campaign, set-up to highlight this risk. 

The firm says cyber security incidents cost the average small business £25,7003 a year in direct costs (e.g. the costs of IT experts in response to the incident, lost revenue and replacement systems), but this is just the beginning. Indirect costs such as damage to reputation, the impact of losing customers and difficulty attracting future customers, means the true figure can be significantly higher.

Robert Hannigan, former Director of GCHQ and Special Advisor to Hiscox, said: “Cyber crime is one of the biggest security risks facing businesses today but many aren’t taking it seriously and many more are underprepared. It’s a less tangible risk than burglary or a fire which can make it hard for businesses to grasp, so bringing cyber crime to life with an exercise like this is a useful way of conveying an important message. 

“The hacking techniques being simulated such as ransomware and phishing are extremely commonplace and have been for many years. At the same time, new types of cyber crime continue to emerge, which makes staying on top of cyber security an ever-evolving challenge.”

Will Butler-Adams, CEO Brompton Bicycle, added: “Our business is about our bike; the design, function and support we give to our customers over the life of the product. We have spent forty years developing the Brompton brand and continue to take risks to innovate and improve the design. When people copy us, with little understanding of the engineering and care behind the design, they are trying to fool our customers who may go on to buy a potentially dangerous product. We wanted to work with Hiscox to highlight these risks, as it is a serious issue and is not limited to the product but also to online cyber fraud, spam emails and viruses, that hurt businesses and their customers alike.”