Cyber attacks could cost retailers nearly a quarter of customers
Nearly a quarter (24%) of consumers would completely stop using a brand if it suffered a data breach, highlighting the growing financial and reputational risks faced by retailers, according to RSM UK’s Consumer Outlook.
This comes after major brands such as Marks & Spencer, Jaguar Land Rover, Co-op and Harrods suffered a cyber attack last year, with M&S alone estimated to have lost £136m as a result.
That said, RSM’s survey of 2,000 consumers found almost two-thirds (65%) are comfortable giving brands their personal details to get personalised offers or recommendations.
Sheila Pancholi, Partner and Head of Technology Risk Assurance at RSM UK, said: “Our findings are a stark reminder of just how damaging a cyber attack can be for a business. Losing almost a quarter of their customer base could amount to a significant loss in revenue, so retailers mustn’t get complacent.
“Recent cyber attacks that have hit major retailers show no matter how big or small a business is, they are still vulnerable, particularly as cyber criminals become increasingly sophisticated with the advancement of artificial intelligence. It’s no longer a case of “if”, but “when”, retailers may fall victim to an attack.
“While having robust cyber controls in place to prevent an attack is imperative, this is no longer enough. A brand’s ability to effectively contain, respond to and communicate an attack to its customer base is equally as important. M&S is an excellent example of providing honest, regular communication with its shoppers, taking a customer-first approach, which has enabled the brand to keep hold of its loyal customer base.”
Jacqui Baker, Partner and Head of Consumer Markets at RSM UK, added: “With the majority of consumers willing to provide personal details in exchange for personalised benefits, retailers should maximise this opportunity to truly understand their customer base. Loyalty schemes are a great way to obtain rich data, and they’re increasingly becoming a “must have” to remain competitive. However, adopting loyalty cards brings greater risk of being targeted by hackers, particularly if the retailer holds highly sensitive data. So before venturing into the space, it’s imperative the business has embedded strong cyber controls, as well as a comprehensive incident response plan.”