Few things can send a retail company into disarray like a data security breach. When sensitive data or customer information is compromised, the entire company becomes vulnerable. Its assets can be stolen, its trade secrets and proprietary data can be exposed, and its customers and employees can themselves become vulnerable to attack.
These kinds of cyberattacks happen more often than you might expect. Retail giants like Target, Staples and Home Depot, as well as ecommerce sites like eBay, have all been victims of breaches that resulted in millions of compromised records.
IBM recently sponsored a study examining the cost of data breach incidents for companies in the United States and found that the total average cost that organizations paid increased from $6.5 million to $7 million from 2014 to 2015. The average cost for each lost or stolen record containing sensitive and confidential information increased from $217 to $221.
Data breaches wreak havoc
Logistically, a data security breach sets off a scramble inside the company that can last for days, weeks or even months as security engineers, developers, and executives rush to find and seal the breach. It takes a serious toll on worker morale throughout the organization. Fixing the problem often requires long hours, causing burnout among some of the retailer’s most important employees, and if the breach was serious enough that a manager or executive is fired, the people working in his or her division are suddenly fearful of reorganization and layoffs. Even after the breach is initially fixed, the repercussions can last a long time.
Financially, a data security breach can cost a retailer millions of dollars, as the IBM report illustrates. Part of…