With the holiday season fast approaching, the Grinch might not be the only one trying to steal Christmas. The surge in cyberattacks could bring down the typical optimism exhibited by retailers during this time of year, especially as companies hard hit by past data breaches try to cope with security concerns.
Firms like eBay and Target, which were both scrutinized by the media for their widespread data breaches, are looking to recover from these incidents this holiday season. In 2013, Target discovered it was the victim of a malware attack affecting its point of sale systems at stores throughout the country right in the middle of the busiest shopping period of the year. The attack resulted in the exposure of 110 million records, with financial records accounting for 40 million.
Like Target, eBay faces potential profit losses as a result of its systems being compromised. Recently, eBay said its sales projections for the fourth quarter fell short of its initial expectations as a direct result of the data breach that occurred earlier this year, Bloomberg reported.
"They're still feeling the impact of the data breach," said Victor Anthony, an analyst at Topeka Capital Markets Inc., according to Bloomberg.
Holiday Spending to Rise
This year, retailers will have to be more careful about how they guard against cyberattacks, as retail sales are expected to increase significantly.
Average consumer spending this holiday season is projected to rise almost 5 percent to reach just over $804, according to the National Retail Federation. The increase in the combined spending from Christmas, Kwanzaa and Hanukkah shows consumer confidence has bounced back after the recession, and retailers have a positive outlook for business growth this year. However, there are challenges to achieving this greater revenue if companies are not vigilant about protecting themselves against cyberattacks and other security incidents.
Shoppers will not only hit stores to get their presents in time. The NRF survey found the majority of consumers will do their gift shopping online, with 56 percent saying they will login to buy presents. This is the highest level recorded since the organization began its survey 13 years ago. There is also a significant percentage of consumers who said they will try to find their loved ones presents using their mobile devices.
As cybercriminals attempt to infiltrate companies' payment systems in stores as well as through Internet networks and mobile devices, the retail industry will most likely to be prepared for an influx of attacks this holiday season.