Don't let Black Friday turn bleak
YOU may still only be recovering from the marketing extravaganza that is Halloween, but the latest American commercial import, Black Friday, will be upon us on November 24.
It's hard to imagine that only a few short years ago Black Friday was an alien concept to these shores. It was something linked to that US-centric holiday, Thanksgiving.
But not any more. And for local retailers Black Friday and the following Cyber Monday are immense, though from an insurance perspective, the sector has become increasingly exposed.
In 2016, UK shoppers spent £5.8 billion during the Black Friday weekend, up 15 per cent on the previous year. Globally, the payment service Worldpay processed 181 transactions per second at the peak of activity. At home, Argos handled 15 orders every second in the peak shopping hour just after midnight.
This is, of course, excellent news for retailers, but too many firms have yet to realise that if they have any online presence, they are potentially victims of cyber crime. No reasonable retailer would fail to protect itself against physical theft, so why not villainy of the online variety, particularly when retailers have to ensure the integrity of their customers' personal data?
Last year, it was estimated that over £18 million was stolen from UK bank accounts during the Black Friday period. In one year it's thought that 4.5 million people in the UK had to cancel credit and debit cards due to concerns over security and fraud. Consumers are unlikely to be forgiving if it transpires that the fraud was due to slack online security by a retailer.
The British Retail Consortium (BRC) is so concerned that it has launched a new Cyber Security Toolkit which is a must read for any retailer, even if you only use Facebook. The BRC's 2016 Retail Crime Survey found that over half of fraud reported in the retail sector is cyber-enabled, representing a direct cost of £100m.
As online shopping continues to grow rapidly (about 25 per cent of all consumer spending is now online) criminal elements have become ever more adventurous and creative in their approach – from ‘doxing' to ‘whaling' and ‘spoofing' along with firm favourites such as ‘phishing'.
Government is so concerned that it is has committed £1.9 billion to combat cyber crime over the next five years. The cold truth, however, is that responsibility starts with individual retailers.
Cyber crime is not something confined to major population centres. Nor is it something which only happens elsewhere. Just last month, Cork-based Musgrave, which operates Centra, Mace and Supervalu stores, was hit by hackers who tried to steal credit and debit card numbers and expiry dates.
Sadly, it's inevitable that more local retailers will come under similar attack, and not all will have robust systems in place to protect themselves, their customers and their hard won brand reputation.
Cyber insurance won't stop cyber crime, but it can ensure that retailers are protected from its financial consequences, provide the specialist skills needed to undo the criminals' work and help with business recovery and continuity.
Black Friday should be the highlight of the retailing calendar - don't let it turn bleak by leaving your business needlessly exposed.
:: Diane Johnston is head of SME at Autoline Insurance Group (www.autoline.co.uk/business)