Retail data breaches threaten customer loyalty

A high percentage of Americans would change their shopping habits if their favorite retailer was hit by a data breach according to a new study.

Data security specialist Vormetric commissioned the survey over 1000 US adults from Wakefield Research which found that for 85 percent of respondents the significant personal consequences that can result from a breach would cause them to find a new place to shop.

Factors that would cause them to take their business elsewhere are, if money was taken from their checking account (67 percent), unauthorized charges appearing on their credit card (62 percent), leakage of personal information (57 percent), and damage to their credit score (54 percent).

"It's been two years since major retail attacks made 'data breach' a household word", says Tina Stewart, VP of marketing at Vormetric. "The revelation of a major data breach following the Black Friday weekend in 2013 was the starting point for two record years of data breaches that have followed. Events since then have demonstrated just how much financial and reputational havoc a data breach incident can wreak on beloved brands".

The results underline the fact that retailers need to take security seriously or risk losing their customers. Protecting data by meeting minimum compliance requirements is no longer sufficient to guard sensitive data. Many recent retail breaches have occurred at organizations that were certified compliant with highly ranked standards like PCI-DSS.

"The time has come for retailers -- and indeed all organizations -- to embrace a data-centric mindset and change their approach to how their data is protected", says Sol Cates, CSO at Vormetric. "With attackers now using multi-phase approaches to breach organization's perimeters and networks, a stronger focus on better securing company data where it is stored is required. Encryption and access controls are now front-line defenses for defending data at rest. With encryption becoming increasingly easier to implement, there is no excuse for not protecting your organization’s sensitive data, regardless of where it resides".

More information on how retailers can protect themselves is available in the 2015 Insider Threat Report on Vormetric's website.

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