Have you heard the news from today? Target’s CEO has stepped down, according to the St. Paul Pioneer Press:
… after a devastating holiday-season data breach and uneven growth that failed to live up to the company's storied past.
Does the “uneven growth” have anything to do with the economy? Possibly. But it is just as likely that customers lost confidence in Target and its ability to protect their personal information. After all, there are plenty of other retailers out there, both brick-and-mortar stores and online options, so why continue to frequent a retailer who didn’t take your security seriously? As Dave Hansen, president and CEO of SafeNet, told me in an email:
With the increase in data breaches, there has been a defining down of trust where consumers today simply assume data breaches are inevitable. In fact, a recent study found that nearly 75 percent of consumers don’t believe companies care about the security of their data. The resignation of Target’s CEO could signal the beginning of the end for this security apathy, and it’s quite likely that we'll start to see a transformation of the security mindset around protecting data.
Getting rid of security apathy would be a wise decision for enterprise. The reason is simple: Customers are turning away from businesses that suffered a data breach. A new study from Javelin Strategy & Research, commissioned by sensitive data management solution provider, Identity Finder, found that a third of consumers will find a new store to shop in after a retail breach, another 30 percent will switch to a new health care provider, and nearly a quarter will use a new bank or credit card company post breach.
As Al Pascual, senior analyst of security, risk and fraud at Javelin Strategy & Research, stated in a release:
That's real money lost in customer churn and reduced sales, and certainly demonstrates how the reputation of the organization hits the bottom line.
Can your company risk losing a third of its customers? I think this should be the number-one question asked when creating a security plan. Customers do care about security, and it is clear that they want businesses to care, too.