How to Prevent Retail Supply Chain Attacks

Online shopping has transformed retail into a billion-dollar industry due to the convenience technology brings. However, no matter how good anything is, it will always have an Achilles heel, at least a possibility of one. We are talking about supply chain attacks. 

Retail companies rely on supply chain processes to deliver excellence to their customers and that’s where the problems usually start. Research shows that 1743 businesses in the United States alone were impacted by supply chain cyber-attacks. 

Why Retailers are Prone to Supply Chain Attacks

• Vast and Rich Data for Hackers: Retail and FMCG businesses have a large customer base. These businesses usually have online stores making the customer base quite sizeable. Logistics management systems will typically have all customer data and this information is what cybercriminals are after. 
  
• Open Source Systems: Open source systems are probably the easiest way for cyber criminals to induce a supply chain attack. Organizations with budget constraints aren’t ready to buy a system from a reputed third-party vendor and turn to open-source systems that are infected with malware as these systems are open to the public.

• Unskilled Workforce: Businesses with a supply chain process are usually large enterprises like retail, manufacturing, etc. These companies leverage multiple systems to optimize various business operations and have a large workforce who are blue-collar and aren’t skilled in security measures, which may make them the weak link during a cyber attack. 

• Third-Party Reliance: To track and optimize various supply chain activities in the business, retailers typically use multiple third-party systems. Based on requirement this can range from a simple application to a large Transportation Management System (TMS). Without robust security features, third party systems are the first point of entry into the organisations’ IT ecosystem for cyber criminals.

How Supply Chain Attacks Cripple Retail Businesses

• Dwindles customer loyalty: Research says that 99% of retail cyber-attacks are to gain access to customers’ personal information and payment credentials. This information is then auctioned off for money on the dark web or other places on the internet. No customers want that. They’ll view the brand as the sole entity responsible for their personal and financial data misuse. Customers are rattled by the slightest shopping experience and this would most likely cause them to switch loyalty and never return.

• Hefty Lawsuits: You’ve already lost your customers, but it won’t be the last you hear from them. They file a hefty lawsuit against you and not to mention the govt will be at the throats of the retailers for data privacy violations. 

• Dip in revenue and profits: Customers are gone and they are filing lawsuits against your organization and governments are slapping hefty monetary penalties for non-compliance. 

• Brand name takes a big hit: Retail brands which are B2C, thrive on good branding. Negative branding can dismantle a company’s reputation completely. News like a breach of data privacy can’t be kept under wraps as financial frauds are immediately informed to the customers.

How Retail Businesses Can Mitigate Supply Chain Attacks

• Leverage secure logistics solutions: 

Every retail business needs a Supply Chain Management system. Now the capability of the system depends on the vendor or if it is a custom-built solution, it’s on the in-house teams. It’s one thing if retailers aren’t able to deliver customers’ orders on time. But not being able to safeguard customers’ personal and financial data is just unacceptable. A secure logistics management system must have the following:

• Secure APIs: Systems with secure APIs can help logistics system data safe, reducing the chances of data leakage.
• Compliance with data security laws: A robust logistics system provides an accurate trail of audit records that comply with GDPR, SOC2, CIS, PCI DSS.
• Single Sign On (SSO) and RBAC: Logistics platforms with Single Sign on authentication and Role Based Access Control can severely restrict cyber criminals from taking control of the system.

• On-board a robust cybersecurity vendor: A cybersecurity platform/solution is a must for every large enterprise, especially an organization like retail that houses large volumes of personal and financial information. 

• Build strong in-house cyber divisions: Even with robust systems guarding your data, without a capable team to monitor and leverage that software to the fullest, your data isn’t fully protected.

• Train employees: With companies like retail, unskilled laborers may have access to company systems to update information, which makes them a user of a system and hence a weak link for cybercriminals to exploit. Providing every employee training on cyber threats is essential for improved data security.

Cyber threats are evolving and retail and similar businesses that have large customer data are the primary targets. Every software or hardware system that is implemented in these organizations must comply with data privacy laws, must have high threat detection capabilities, deter and neutralize threats. 

Locus’ secure Order to Delivery platform that has been helping top brands like TATA, Lulu Group International, Nestle and more optimize their supply chain and logistics operations. Book a demo to see why these top brands trust us.