Retail giant Marks & Spencer may need to launch a campaign aimed at winning back customer favor following recent setbacks.
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Marks and Spencer (M&S) faces a daunting task in regaining customer trust after a cyber incident left them vulnerable, potentially damaging their payments data, and causing a substantial dip in sales. This digital attack, reported at the end of April, has taken a toll on the brand's reputation, with around £1bn being shaved off its market value since 1st April. Estimates suggest M&S is losing approximately £1m daily in sales.
Amidst this turmoil, M&S has declared that it has been working tirelessly to address the issue, but online sales remain sluggish as of 8th May. AJ Bell analyst Dan Coatsworth cautions that even though companies usually find solutions and resume normal operations in the long run, there's a significant risk of customers losing trust in the brand. To regain consumer confidence, M&S needs to embark on a rebuilding mission to convince customers of its commitment to business once more.
Experts caution on the repercussions of such eroded consumer trust following a cyber attack, particularly when it involves sensitive payment information. Organisations take an average of seven and a half months to completely bounce back from a cyber incident, with recovery stretching out 25% longer than initially anticipated, according to Fastly.
Retailers like M&S operate in an extremely competitive and low-margin environment. Even minor disruptions can cause severe harm to customer retention and revenue. Brands such as M&S and Harrods carry significant legacy systems and high customer expectations, making recovery more challenging.
Cyber resilience must be treated as a long-term priority, not just a short-term concern, otherwise, a cyber event could escalate into a protracted business crisis. Failure to prioritize security can erode customer trust, leading to a prolonged decline in market share and revenue. In essence, M&S is battling a long and complex recovery process following the cyber incident, with the protection of sensitive payments data serving as a critical aspect during their rehabilitation.
- Despite the reports of Marks and Spencer (M&S) striving to solve the cyber incident issue, their online sales continue to be sluggish since the incident in late April, potentially due to a disproportionate loss of customer trust.
- The digital attack on M&S, which compromised their payments data and damaged their market value, has left the brand struggling to regain consumer confidence.
- Technology, specifically cyber resilience, is a critical component in M&S's rebuilding mission, as without prioritizing security, the prolonged decline in market share and revenue could result.
- Experts suggest that recovery for organizations, like M&S, after a cyber incident can take an average of seven and a half months or even longer, as most of these recovery periods are 25% more prolonged than initially anticipated.
- The finance sector and businesses like retail, including Marks and Spencer and Harrods, face significant risks when sensitive payment information is compromised due to the competitive and low-margin environment, making recovery even more challenging.
