The retail race for digital transformation is being run without the safety of security measures.

As retailers of all stripes try to keep up with competitors through digital transformations, the data indicates they're still not building in security into those technical makeovers. A new report out this week shows the number of US retailers reporting being breached in the last year more than doubled to 50% in 2018, compared with only 19% in 2017.   

The data was collected for the "2018 Thales Data Threat Report, Retail Edition," which also indicates that the pool of retailers being hit by breaches is broadening with the jump in incidents. The study shows that the rate of retailers reporting they'd been hit by at least breach anytime in the past shot up to 75%, from 52% last year.  

"These increases come as no surprise to retailers," says Garrett Bekker, principal analyst for information security at 451 Research, who explains the survey showed that the number of retailers who reported their organizations are extremely vulnerable to data breaches increased by a third this year. "This trend can be partially attributed to US retailers' aggressively pursuing a multicloud strategy, [yet they] continue, year after year, to spend on the same security solutions that worked for them previously."  

According to Bekker, retailers are increasingly depending on cloud services and other innovations while still counting on traditional endpoint and network security protections to keep them safe. The survey shows that 95% of retail organizations use sensitive data in advanced technology environments — including cloud, big data, IoT, and container technology — but only a little more than half believe that sensitive data flowing into these systems is being protected with adequate security in place.

The numbers also show that while retailers are more likely than other sectors to utilize cloud technologies, they're also less likely to put protections in place. For example, retailers are slower than other industries to use encryption, with only 26% that say they are implementing the tech in the cloud today. 

Similarly, the recent "2018 Trustwave Global Security Report" shows retail to be the sector most affected by data breaches in 2017. Seventeen percent of the incidents studied by the firm were at retail organizations, compared with 13% at financial institutions and 12% at hospitality companies.

While many retail organizations do plan on throwing money at the problem in the upcoming year, planned spending priorities show that they may be funneling cash into less-than-optimal security strategies. Around 84% of organizations say they'll increase IT security spending in the coming year, and 28% say that increase will be significant. But at the same time, endpoint and mobile defenses are those targeted for the largest increases, cited by 72% of organizations — this in spite of the fact that survey respondents report these protections as the least effective compared with technology like analysis and correlation tools. 

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About the Author(s)

Ericka Chickowski, Contributing Writer

Ericka Chickowski specializes in coverage of information technology and business innovation. She has focused on information security for the better part of a decade and regularly writes about the security industry as a contributor to Dark Reading.

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