Seven Cyber Threats Facing the Retail Industry and How To Defend Against Them

Some common cyber threats facing the retail industry include ransomware attacks, social engineering, system intrusions and insider threats. The retail sector is often targeted by cybercriminals because of the valuable customer data it processes, including credit card information, Personally Identifiable Information (PII) and shopping patterns. This data is often collected and sold on the dark web for financial fraud or identity theft.

Continue reading to learn about seven of the most common cyber threats related to the retail industry and how organizations can defend against them.

1. Ransomware attacks

Ransomware attacks encrypt an organization’s files and systems, making them inaccessible until the ransom is paid. However, paying the ransom doesn’t guarantee that the data will be recovered. According to a 2024 Sophos study, 45% of retail organizations fell victim to ransomware attacks, with a mean recovery cost of $2.7 million. Ransomware attacks affect the retail industry by disrupting the natural flow of sales and tarnishing a company’s reputation, leading to damaged customer trust and significant financial losses.

2. Social engineering

Social engineering is a technique used by cybercriminals to psychologically manipulate retail employees into revealing private information. Cybercriminals often target retail staff to obtain customer payment data, loyalty program information and employee credentials that could be sold to make a profit on the dark web. Based on data from Trustwave, 58% of cyber attacks begin with phishing – where a cybercriminal impersonates trusted organizations to steal sensitive information. In the retail industry, cybercriminals may research store operations and hierarchies to try to impersonate district managers or regional supervisors. Some may even pose as vendors, delivery personnel or staff to gain access to customer databases and other sensitive data.

3. Web application attacks

A web application attack occurs when a cybercriminal exploits security vulnerabilities within a website or e-commerce platform. These attacks can involve malware injection, SQL injection, cross-site scripting or credential stuffing. According to Akamai’s research, approximately one-third of web application attacks target the retail industry. Common retail targets include online shopping carts, payment processing pages and customer accounts. Cybercriminals take advantage of an online store’s weaknesses, such as flaws in coding or outdated systems. 

4. System intrusions

A system intrusion occurs when cybercriminals use stolen login credentials to gain unauthorized access to a system, network or device. For retail companies, once the cybercriminal gets access, they can tamper with inventory data, create fake employee accounts to process fraudulent returns or install malware to disrupt store operations and Point of Sale (POS) systems.

5. Advanced Persistent Threats (APT)

In the retail industry, an Advanced Persistent Threat (APT) occurs when cybercriminals infiltrate retail networks without being detected for a prolonged period of time. Typically, it is challenging for one cybercriminal to execute an APT alone, so highly skilled cybercriminals may work together as a team to identify security vulnerabilities to exploit. The goal of an APT is for cybercriminals to stay undetected for as long as possible while stealing sensitive data, spying on employees’ online activities and sabotaging internal systems. Based on PurpleSec’s 2024 data, 34% of organizations that suffered APT attacks reported experiencing reputational damage. APTs can significantly affect organizations in the retail industry because large amounts of customer data may be compromised, which could lead to major financial damage once the unauthorized activity is detected.

6. Insider threats

An insider threat occurs when an employee, partner, contractor or vendor compromises or steals data. Insider threats can happen by accident or intentionally, depending on the insider’s goals. Regardless of how an insider threat occurs, this type of cyber threat can negatively affect a retail organization if someone with authorized access to sensitive information misuses their power to steal or sabotage customer data. According to Cybersecurity Insiders’ 2024 report, 83% of organizations have reported at least one attack committed by an insider. Since most retail employees have access to customer information, an insider may be motivated to steal or sell sensitive data, such as credit card details, for revenge or financial gain.

7. Credential theft

Credential theft happens when cybercriminals steal login credentials to access systems, typically through phishing attacks or data breaches. Based on Verizon’s 2024 Data Breach Investigations Report, stolen login credentials were used in 77% of data breaches. Once a cybercriminal tricks a person into sharing login credentials or finds compromised login credentials following a data breach, they can use the credentials to cause reputational and financial damage. Cybercriminals may steal customer login credentials from retail databases and use those credentials to make fraudulent purchases while impersonating a customer.

How retailers can protect themselves from cyber threats

Retailers can stay protected against cyber threats by leveraging zero-trust security, backing up their data regularly and implementing least-privilege access.

Implement zero-trust security

Zero-trust security is a security framework that requires all human and non-human identities to be constantly verified, which strictly limits access to sensitive data. A core principle of zero-trust security is to always assume data breaches will occur. Zero trust limits who can access sensitive data based on who the user is and what job they need access for. With zero-trust security, administrators have greater visibility over user activity, stronger communication across various networks and reduced risks of password-based cyber attacks.

Regularly back up data

Regularly backing up data is important for reducing the risks of cyber attacks in the retail industry. For example, if a cybercriminal executes a ransomware attack and holds data hostage, the lack of backups could disrupt operations until that data is restored and put more pressure on the organization to pay the ransom. Prolonged operational outages may result in revenue loss and reputational damage. However, by regularly backing up data, retail organizations can restore data to a state prior to the attack, minimizing both downtime and the need to negotiate with a cybercriminal to resume operations.

Implement least-privilege access

The Principle of Least Privilege (PoLP) ensures that users are given only the access necessary to do their job. Implementing PoLP is needed in the retail industry because employees should not have unnecessary access to privileged data in the event of a data breach or cyber attack. This is important because the more access employees have to sensitive information, the greater the attack surface is for cybercriminals to exploit security vulnerabilities.

An easy way to implement PoLP is by using a Privileged Access Management (PAM) solution. A PAM solution can prevent cybercriminals from moving laterally throughout an organization’s network, which limits cybercriminals to only the information available to a specific user whose credentials grant them unauthorized access. In addition to reducing external threats, a PAM solution can also minimize insider threats because, by implementing PoLP, a user will only have access to what they need to perform their job. Without additional privileges, a disgruntled employee cannot seek revenge or steal information that goes beyond their jurisdiction.

Secure Point of Sale (POS) systems

Using secure Point of Sale (POS) systems can defend against cyber threats through strong security measures, such as regularly updating software and staying compliant with the Payment Card Industry Data Security Standard (PCI-DSS). Secure POS systems should encrypt customers’ payment information both at rest and in transit to prevent cybercriminals from intercepting sensitive data. By keeping POS systems’ software, hardware and firmware regularly updated, organizations stay protected against cyber threats and ensure customer information is safe from data breaches.

Implement firewalls and Intrusion Detection Systems (IDS)

A firewall helps protect networks from external threats by controlling and filtering the network’s traffic. Whether software-based or hardware-based, firewalls help ensure networks are secure from external threats. 

In addition to firewalls, implementing an Intrusion Detection System (IDS), which constantly monitors a network’s traffic for suspicious activity by scanning for unusual behavior, can secure an organization’s network against unauthorized access. With an IDS in place, organizations receive real-time alerts before significant damage can occur. Using both a firewall and an IDS reduces unauthorized access and identifies malicious behavior by potential hackers.

Train employees on cybersecurity best practices

To protect against cyber threats, employees must be trained in cybersecurity best practices and security awareness. This involves educating employees about phishing attempts through simulated phishing tests. These tests use fake phishing emails to evaluate how employees respond to potential threats. Before running a phishing test, employees should be notified and trained to recognize phishing attempts. This helps them identify common tactics used by cybercriminals. After conducting the phishing test, results should be evaluated to determine what further training is needed. 

Defending retailers against cyber threats

Protect your retail organization against potential cyber threats by implementing zero-trust security, backing up your data frequently and investing in a PAM solution like KeeperPAM^® to manage privileged access. With KeeperPAM, your organization can implement and enforce PoLP, ensuring that users and systems have only the access necessary for their roles. KeeperPAM can minimize your organization’s attack surface and reduce the risk of unauthorized users gaining access to your sensitive information.

Request a demo of KeeperPAM today to reduce security vulnerabilities and defend yourself against various cyber threats.