Retail Terror: Cyber Breaches
Since the beginning of 2014 there has been a new threat to both retailers and consumers alike. This threat has been the rise of the cyber breach. A cyber breach is when a hacker works their way into a retailer’s server and steals vital customer information like credit card numbers and social security numbers. While it is not sold on the shelves or included on the receipt retailers like Target and Home Depot are selling piece of mind that their payment information will be safe. It makes for interesting research to see exactly what happened with these two retailers and the effect that these breaches have had on both business and public reception. First, Target was the target of a cyber-breach between the dates of November 27th of 2013 thru December 15th of 2013. Obviously, the end of November thru the middle part of December is pretty busy times for a retailer like Target so this was especially damaging. Initially target said that a very small amount of customer information was exposed but customer distrust and panic drove busy holiday sales down between 3 and 4 percent. This caused Target to lower their 4th quarter projects and also the laying off of 475 corporate employees. To date, Target and the Wall Street Journal put the total cost of the Target breach over the 200 million dollar mark. Because of the poor handling of the breach Target President and CEO Gregg Steinhafel stepped down in May. This was a huge disaster for a retail giant that has built a reputation as being the best of the chain retailers. From my research I believe that as bad as this breach was the reason for the all the blowback and changes is the fact that there was not a true statement given right off the top and public distrust and misinformation cost.
Retail Terror: Cyber Breaches
Turning our attention to another attack that happened earlier this year take us to the Home Depot. The Home Depot has been an industry leader since its inception in the 1970’s and has built its business on the idea that home owners have to want to do their own home improvements. Home Depot started with the idea that they wanted to have the largest selection of products available in the industry but wanted to pair that selection with a well-educated staff who teach home owners not only have to find the products that they need but also how to do the projects. They have set the industry standard when it comes to customer service and education. However, immediately following the 3rd quarter earnings report news broke about a cyber breach that was worse than the numbers reported in the Target attack. After hearing about how badly Target suffered with their attack you would think that the loss of business and public and media backlash would be worse. However, Home Depot was able to navigate their way through any troubles from the breach and seemingly continued business as usual. Obviously, part of this outcome is because they are not a home goods retailer and this did not happen during the busy holiday season. But, Home Depot’s business did not skip a beat and their stock price continued to rise. The