Top Retail Cybersecurity Challenges

E-commerce lets retailers use customer data and segmentation to deliver unique customer experiences. In fact, in the U.S., e-commerce sales for 2024 were about $1,192.6 billion, up ~8.1% from 2023, and online sales made up 16.1% of total retail sales, rising from 15.3%. That’s why the industry eagerly pursued digital transformation. 

Unfortunately, that customer data also creates new vulnerabilities that weren’t part of traditional brick-and-mortar retail. Around 43% of retailers experienced a cybersecurity breach in the past year.

Why Retailers Are Prime Targets for Cyber Threats

Retail is one of the most frequently attacked industries in the world, and it’s not hard to see why. The combination of high transaction volumes, sensitive customer data, and complex, distributed systems makes retailers an irresistible target for cybercriminals.

Inside information theft has been a risk since the dawn of time, and the present age is no exception. But as technology grows, so do the type of attacks. Now retailers must also deal with e-skimming, credential stuffing, phishing, ransomware, DDoS attacks, and weaknesses in POS systems.  

From e-commerce platforms to in-store point-of-sale (POS) systems, every digital touchpoint is a potential entryway for attackers looking to steal payment card data, customer credentials, and loyalty program information, all of which can be quickly monetized on the dark web.

And as the industry continues to grow digitally — with 2024 U.S. e-commerce sales topping $1.19 trillion, up more than 8% from the previous year — the attack surface keeps expanding right alongside it.

1. Credential Stuffing and Unsecured POS Systems

Credential stuffing remains one of the most common and effective ways attackers gain unauthorized access to retail systems. Using stolen usernames and passwords from unrelated breaches, cybercriminals attempt to log in across multiple accounts, from customer reward portals to employee dashboards. Since many users reuse passwords, these automated attacks can quickly compromise thousands of accounts with minimal effort.

At the same time, unsecured POS systems are another persistent weak spot. Many are still running outdated software, using default settings, or operating without proper network segmentation. Attackers exploit these vulnerabilities to capture payment data in transit or install malware that collects card information at checkout.

Retailers can significantly reduce this risk by adopting strong security controls and adhering to industry standards like the PCI DSS compliance template, which outlines requirements for safeguarding payment information.

2. Cloud Misconfigurations and Vendor Vulnerabilities

As retailers move operations to the cloud, misconfigurations have become a leading cause of data exposure. Common mistakes, such as open S3 buckets, permissive identity and access management (IAM) policies, or lack of encryption, can leave backend systems publicly accessible.

Even when internal systems are locked down, third-party vendors can open new doors for attackers. Retailers depend on SaaS tools, delivery and logistics platforms, and marketing automation software, all of which often require access to sensitive systems. A single compromised vendor account can provide a direct route into the retailer’s network, as seen in several high-profile supply chain attacks over the past few years.

The key to prevention lies in rigorous access management, regular cloud configuration audits, and continuous vendor risk assessment.

3. Phishing and Ransomware Attacks

Retail organizations also face relentless phishing and ransomware attacks, often aimed at the most vulnerable point in the chain: their employees. Seasonal or part-time staff may not receive comprehensive cybersecurity training, making them prime targets for credential theft through convincing phishing emails or text messages.

Once inside, attackers can deploy ransomware that cripples operations, shutting down POS systems, inventory tracking, and logistics. These incidents often cost millions in downtime and lost revenue, not to mention reputational damage that erodes customer trust.

To minimize the impact, retailers need to invest in ongoing employee training, simulated phishing exercises, and robust incident response plans. The faster a team can identify and isolate an attack, the less damage it can cause to both operations and customer confidence.

Not sure if your network security would hold up against these attacks? Download the IT Admins' Guide to find out. 

3 Effective Strategies for Strong Retail Cybersecurity

Retailers today operate in one of the most targeted sectors for cyberattacks. Between managing distributed store networks, processing millions of customer transactions, and working with a web of third-party vendors, the retail attack surface is massive. But while the threats are evolving, so are the strategies to defend against them. 

Below are three key strategies against cybercrime retailers can strengthen their cybersecurity posture — protecting retail wireless systems, payment systems, customer data, and brand trust.

1. Identify and Address Retail Vulnerabilities

Retailers are prime targets because they handle sensitive customer information across high-volume systems — from e-commerce checkouts to in-store POS security endpoints. Attackers know that even a single overlooked weakness, such as an unpatched POS device or a misconfigured vendor account, can give them a foothold into the entire network.

To stay ahead, retailers must actively identify and address retail vulnerabilities. Conducting regular vulnerability scans helps locate weak spots in areas such as network segmentation, third-party access controls, or legacy systems that can’t meet modern security standards like PCI DSS.

Real-world examples illustrate the cost of inaction. In one widely reported vendor breach, attackers compromised a third-party HVAC provider’s access credentials — which were later used to infiltrate the retailer’s internal payment network. Similarly, phishing campaigns often surge during the holidays, when seasonal hiring expands and training gaps widen, giving attackers an easy route to steal employee or customer credentials.

By taking a proactive approach to identifying weaknesses, retailers can prevent these scenarios before they escalate.

2. Implement Secure Network Solutions and Access Controls

Once vulnerabilities are mapped, retailers should focus on securing how data moves between stores, warehouses, and headquarters. Modern secure retail networks rely on strong encryption and identity verification at every access point.

That’s where VPNs and Zero Trust Network Access (ZTNA) tools like CloudConnexa come in. These technologies ensure that only verified users and devices can access sensitive systems — no matter where employees connect from. For example, a VPN for retail operations protects data flowing between stores and central systems, while ZTNA continuously authenticates access based on user identity and context.

Following security best practices further strengthens protection:

• Enable MFA (multi-factor authentication) for all employee and admin accounts.

• Segment networks to isolate POS systems and internal databases from guest Wi-Fi or third-party systems.

• Monitor data flows for anomalies that could signal compromise.

• Patch systems frequently to stay ahead of known vulnerabilities.

• Use Secure Remote Desktop Access where possible.

For more detailed guidance, see:

• Enhancing network security with VPNs

• How VPNs can secure retail operations

• Cybersecurity essentials for small businesses
  
  

3. Integrate Proactive Cybersecurity Practices for Ongoing Protection

Technology alone isn’t enough. The strongest defenses come from continuous education, monitoring, and policy enforcement. Retailers should integrate ongoing employee training, routine IT security audits, and incident response drills to reinforce technical safeguards.

Long-term protection also depends on reliable data backups, strict role-based access controls, and consistent compliance monitoring, especially for organizations operating across multiple regions and regulations. Here are a few do's and don'ts as you get started:

Do:

• Schedule regular audits and patch management reviews

• Adopt a Zero Trust framework to control internal access

• Train staff regularly on phishing and credential hygiene

Don’t:

• Store sensitive data in plain text

• Skip policy updates when expanding to new markets or systems

To learn more about connecting distributed retail locations securely, explore Connecting retail locations securely.

Secure Your Retail Environment Today

The retail threat landscape isn’t slowing down — but with the right strategy, it doesn’t have to compromise your business. By identifying vulnerabilities, implementing secure network solutions, and maintaining proactive security practices, retailers can protect customer data and reinforce long-term trust.

Protecting customer information isn’t just compliance — it’s a brand promise.
Start implementing these strategies for enhanced retail cybersecurity now, and ensure your business stands on a solid foundation of trust.