Retail supply chain network preparing for a nightmare before Christmas

Disruptions to the supply chain network continue to cause problems to retailers as they prepare for the holiday season sales.
5 November 2021

(Photo by Brandon Bell / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

Retailers are preparing for the worst as disruptions to the supply chain network may just lead to a bleak Christmas for both businesses and consumers. The approaching holiday season always offers the biggest amount in sales but retailers are facing multiple delays in getting their products to customers for a variety of reasons.

While logistical issues in major ports around the world are a contributing factor to the supply chain disruption, retailers have also had to deal with increasing cyber attacks at numerous fronts. Cybercriminals are now no longer only targeting their data but are also crippling their business supply chain by launching attacks on customers and the retail supply chain network as well.

There have already been several major retailers that have been hit with supply chain network attacks in recent months. In the summer of 2021, the Russian hacker organization REvil launched a ransomware attack on manage services provider (MSP) Kaseya. The cyberattack not only disrupted the MSP’s servers but also impacted clients all over the world, including supermarkets in Europe.

The Cybersecurity and Infrastructure Security Agency (CISA) have also released a directive requesting organizations, both public and private, including agencies, to fix known vulnerabilities as cybercriminals are using them to launch attacks.

Now, as the holiday season draws closer, cybercriminals will be wanting to pounce on retailers and launch more attacks as well. Sales in e-Commerce are expected to see increasing figures throughout the holiday period as consumers opt for safer modes of shopping due to the pandemic.

According to the State of Security Within e-Commerce report by Imperva, the 2021 holiday shopping season will be further disrupted by cybercriminals looking to create chaos and take advantage of the unprecedented global supply chain crisis. The report stated that given the widespread impact of the global supply chain crisis, the impact of a single cyber-attack on a retailer in Q4 could be devastating.

Even at this point, any disruption will delay shipments and could keep physical and digital store shelves empty throughout the holiday season. The unprecedented situation has reached such a fever pitch that some retailers might find themselves out of business altogether.

“The 2021 holiday shopping season is shaping up to be a nightmare for both retailers and consumers. With the global supply chain conditions worsening, retailers will not only struggle to get products to sell in Q4 but will face increased attacks from motivated cybercriminals who want to benefit from the chaos,” said Peter Klimek, Director of Technology, Office of the CTO, Imperva.

Cyber threats in the supply chain network

Retailers want to provide the best services for their consumers. And with e-Commerce the preferred shopping method, many retailers have added several features to their websites and applications to appeal to consumers. These features which include chatbots, multiple payment options and such are increasingly vulnerable to a cyberattack.

Since many of the services operate outside of the security team’s control, it’s a blind spot for organizations and a potential fraud risk for consumers. If not properly secured, the compromise of third-party JavaScript code can lead to cross-site scripting (XSS), form jacking, cryptojacking, malicious ad injection, data skimming, and more — risks that impact retailers and consumers. These highly effective evasion tactics are difficult for organizations to monitor, even when using advanced network threat inspection tools.

(Photo by Michael M. Santiago / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

Also, Application Programming Interfaces (APIs) are essential for retailers as they improve the e-Commerce experience for shoppers. APIs connect consumers to data and information they need — like inventory availability, product search, order fulfillment tracking, and more.

However, APIs, like JavaScript services, are difficult to monitor and highly vulnerable to attack. In 2021, the top three types of API attacks targeting retailers are data leakage (25.7%), remote code execution (RCE) (17.2%), and XSS (16.8%) — all of which can generate costly breaches.

Imperva’s report highlights several threats that have been a menace to retailers throughout the year and are also most likely to continue causing more problems in the future as well. From cyber-attacks on suppliers to distributors to even cyberattacks on retail websites, retailers need to understand the types of attacks that continue to hit them. They include:

  • Malicious bots – bots carry out an array of disruptive and malicious activities on retail sites including price and content scraping, scalping, denial of inventory, and other types of online fraud. In 2021, the volume of monthly bot attacks on retail websites rose 13%, compared to the same months of the previous year. This underscores the growing threat retailers and consumers face from bad bot activity. Imperva’s report finds that 57% of attacks recorded on e-Commerce websites this year were carried out by bots. Account takeover by bots have also experienced a higher volume and is a risk for consumers who have login accounts that store their credit card or payment information on e-Commerce sites. Compared to other industries, online retailers experienced a higher volume of account takeover logins (32.8%) in 2021, compared to the average logins (25.5%) across all other industries. What makes bots hard to deal with is their sophisticated characteristics, because they’re capable of producing mouse movements and clicks that closely resemble human behavior. Some bots evade simple defenses and are responsible for account takeover, fraud, or denial of inventory that makes it harder for legitimate shoppers to get the goods they want.
  • Distributed Denial of Service (DDoS) Attacks – In September 2021, there was an uptick in DDoS attacks by 200% compared to the month prior. Part of this uptick in activity is tied to the enormous Meris botnet that has impacted organizations globally. Throughout the past 12 months, the retail industry experienced the highest volume of application layer (layer 7) DDoS incidents per month of all industries. Layer 7 attacks are highly effective because they consume both network and server resources. Defending against application-layer attacks is difficult because it requires the ability to distinguish between attack traffic and normal traffic. The United States was the target of the significant majority (61.6%) of application-layer DDoS attacks in 2021.
  • Website Attacks – Attacks on retail industry websites from Q4 2020 through the first half of 2021 were notably higher than all other industries and were characterized by more sporadic peaks in attacks. Retail sites experienced slightly higher volumes of data leakage attacks (31.3%) in 2021 compared to all industries (26.9%) as e-Commerce sites are prime targets because they host shoppers’ payment information or loyalty reward points.

At the end of the day, there is no denying that cyberattacks will increase during the holiday season. But it is not all doom and gloom for retailers. With the right planning and cybersecurity protection, they may be able to reduce some attacks.

CISA’s warning on fixing known vulnerabilities is just one method of protecting the business. Retailers can also opt for more visibility on their services, especially when it comes to e-Commerce. They need to ensure their MSPs can provide them backup and recovery should they experience a cyberattack.

Hopefully, retailers can identify the weaknesses and vulnerabilities in their supply chain network and be able to find solutions for them before they get worse. They can’t do much about physical problems like logistical issues, but protecting their systems and customers is one way of avoiding a nightmare before Christmas.