Cybersecurity In Retail: Trends and Best Practices for 2025

In today’s retail environment, few things are more important than implementing strong cybersecurity practices. A cybersecurity breach can do more than just compromise data — it can significantly erode consumer trust.

According to IBM’s “Cost of a Data Breach Report 2024”, the average cost of a retail data breach now stands at $3.48 million, an 18% increase from the year before. As cybersecurity threats continue to evolve and become more sophisticated, retailers must in turn adopt stronger policies, practices and solutions that enable them to deliver a secure and sophisticated experience for both their customers and their staff.

Going into 2025, here are key areas that retailers must be attentive to.

Retailers’ Growing Role In Combating Customer Account Takeovers

Hackers are growing more and more sophisticated in how they commit cyber fraud. With retailers, an increasingly prevalent tactic is to use phishing to lead consumers to fake websites designed to look identical to the actual retailer. The customer attempts to log in to the fake site, providing their authentic credentials in the process. The hackers can then turn around and use this information to take over the actual account, utilizing the customer’s data to make fraudulent purchases or for other purposes.

While retailers themselves aren’t to blame in these circumstances, this doesn’t mean they can sit back on the sidelines. An estimated 29% of adults have experienced an account takeover, with 70% of victims noting that compromised passwords were not unique to a single account.

Account takeovers (ATO) can cause financial loss for businesses when fraudsters use compromised data to make purchases — charges which are typically canceled after the account owner reports fraud. In addition, customers will often blame retailers for these incidents, straining customer service and resulting in negative word of mouth.

To combat this, a growing number of retailers are becoming more proactive in combating account takeovers. Using tools like Memcyo, which can detect when hackers research website codes, register fake URLs in a company’s name or make a fraudulent website go live, retailers can block digital impersonation-based phishing attacks in real time before they happen and keep their customers safe.

Blocking Malicious Traffic

Customer account takeovers are far from the only threat retailers need to be concerned with. It isn’t unusual for malicious actors to directly target the retailer network itself, taking advantage of the high level of inbound traffic that retailers experience.

One of the most common attacks is a distributed denial of service (DDoS) attack, in which a retailer’s network becomes so flooded with illegitimate requests, that its bandwidth is overwhelmed and no longer allows legitimate users to access the website.

Firewalls have long been the go-to solution for blocking DDoS and other backdoor attacks, but as the attacks grow more sophisticated, so do the cybersecurity needs. A next-generation firewall (NGFW) can be a valuable resource for retailers, as it builds off traditional firewall operations to block a broader range of malicious traffic. By operating at the protocol stack’s application layer, NGFWs offer the ability to inspect encrypted traffic, use sandbox analysis to detect malware and more.

The growing risk associated with DDoS and other backdoor attacks further drives home the importance of proxy firewalls, which serve as an intermediate connection point that prevents direct connections between systems. Of course, these systems require proper configuration and updating to ensure they allow the right traffic through. AI and machine learning are proving to be especially beneficial in this area, by helping firewalls remain effective and better able to respond to risks in real time.

Managing Employee Risk Factors

Retailers must always be vigilant regarding the potential risk factors linked to their employees. A joint study between Stanford University and Tessian found that 74% of business data breaches are caused by employee mistakes. Whether the issue stems from using an unsecured device, creating a weak password, not applying software updates and security patches to a device or installing unauthorized software.

Retailers must implement strong prevention tactics to reduce the threat of employee-related incidents. This can include implementing policies requiring multi factor authentication and complex passwords, rules regarding the use of devices and software and providing ongoing training to help employees understand common cybersecurity risks (such as phishing emails that use minor typos in their email addresses).

Retailers should also implement clear practices for how employees should respond to and report malicious activity or other cybersecurity concerns. These policies and procedures should be covered with all employees, in accordance with their level of access to the business’s digital accounts.

In addition to providing proper training, retailers should also be mindful of factors that can increase the risk of unintentional human error. Environmental factors and stress factors often contribute to security mishaps — retailers should consider how their work environment affects employee decision-making and make adjustments as needed.

Ensuring Cybersecurity In 2025

While specific trends and threats may change, many of the core best practices for retail cybersecurity remain the same. By making use of tools that can limit the potential influence of bad actors and taking steps to proactively address risks related to both customers and employees, retailers can improve their overall cybersecurity status and minimize their risk for a serious breach. As retailers adopt a proactive, preventative approach, they can take control of their cybersecurity profile.

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