Cybercriminals are increasing attacks on vulnerable retailers as the global supply chain crisis continues, according to Imperva.

The cybersecurity firm has released the State of Security Within eCommerce report, a 12-month analysis on cybersecurity risks in the retail industry that suggests that the 2021 holiday shopping season will be further disrupted by cybercriminals looking to create chaos and take advantage of an unprecedented global supply chain crisis.

Last year cybersecurity incidents in the New Zealand retail sector peaked in April when the country was in lockdown Alert Level 4 for the first wave of COVID-19. At that time, there was a sharp increase in online retail sales.

After normalising, incidents spiked again in November, coinciding with the Singles Day and Black Friday/Cyber Monday. There was a spike again in January due to a sharp rise in Data Leakage incidents.

Increased levels of cybersecurity activity are a fundamental business risk for retailers. From website outages to online fraud, security incidents lead to loss of sales and unhappy customers.

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. 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,” says Peter Klimek, Director of Technology, Office of the CTO, Imperva.

“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," he says.

"Imperva Research Labs' data underscores the need for retailers to invest in security that spans from edge to applications and APIs all the way to the data. Only by protecting all paths to data can retailers truly defend their critical systems and the consumers who rely on them.

Retailers Experiencing Higher Levels of Security Incidents

Malicious Bots
Online retail remains a prime target for automated bot activity in 2021. Bots carry out an array of disruptive, and even 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.

Research Labs finds that a majority (57%) of attacks recorded on eCommerce websites this year were carried out by bots. In comparison, bad bots made up just 33% of the total attacks on websites in all other industries in 2021. In NZ, bots were the top type of security incident in the retail industry in the past 12 months.

One specific type of fraud, account takeover, is a risk for consumers who have login accounts that store their credit card or payment information on eCommerce 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.

More worrisome, the proportion of sophisticated bad bots on retail websites reached 23.4% in 2021. This breed of bot is the hardest to stop because they're capable of producing mouse movements and clicks that closely resemble human behaviour. Sophisticated bots evade simple defences and are responsible for account takeover, fraud or denial of inventory that makes it harder for legitimate shoppers to get the goods they want.

In particular, Imperva Research Labs has monitored elevated levels of denial of inventory bot traffic around the time of pre-order and launch sales for popular gaming systems. Most recently, it was evidenced in the 88% rise in bad bot traffic to global retail sites days before the launch of the Nintendo Switch OLED.

Distributed Denial of Service (DDoS) Attacks
As the holiday shopping season commences, Imperva Research Labs is already seeing an uptick in DDoS attacks -- spiking 200% in September 2021, compared to the month prior. Part of this uptick in activity is tied to the enormous Meris botnet that has impacted organisations 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 intensity of the attacks in 2021 -- measured in requests per second (RPS) -- was low, averaging a maximum of 35,000 RPS. However, the frequency of attacks suggests that cybercriminals are taking an approach that is disruptive without being detectable.

While the United States was the target of the significant majority (61.6%) of application layer DDoS attacks in 2021, New Zealand is ranked fifth in the world 3.2%

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 characterised 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 eCommerce sites are prime targets because they host shoppers' payment information or loyalty reward points.

The top three web application attack attempts in the NZ retail sector in the past 12 months (Oct 2020 - Sep 2021) were Data Leakage (29%), Remote Code Execution (RCE) / Remote File Inclusion (RFI) (20%) and Path Traversal / LFI (17%).

In January 2021, the NZ retail industry saw a spike in data leakage incidents, which coincides with the Boxing Day sales. Data leakage occurs when data is transmitted from an organisation's corporate network to an external destination, whether accidentally or deliberately, without authorisation.

Another web application attack being used against NZ retailers is Injection. New Zealand retailers experienced an increase in Injection attacks In March (40% above the monthly average).

According to NZ Post, online spending in quarter one 2021 (Q1 21) saw online spending up 27% on the same quarter in 2020, as the popularity of online shopping continued following the COVID-19 lockdowns of 2020. Q1 21 also saw a couple of short lockdowns for Auckland which would have contributed to this increase.

Injection style attacks have been around for decades, but injection vulnerabilities are still one of the widest classes of potential threats to an application. This is because app developers continue to leave holes to be exploited. To protect themselves, retailers need to ensure their app developers are conducting comprehensive input validation.

Retailers Beware: More Threats Are Ahead as Attack Surface Grows
Common website functionality like chatbots, payment services and web analytics are enabled by third-party JavaScript that executes on the client side. The functionality is a necessity for eCommerce, but is increasingly vulnerable to attack. Since many of the services operate outside of the security team's control, it's a blindspot for organisations 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), formjacking, cryptojacking, malicious ad injection, data skimming and more -- risks that impact retailers and consumers. These highly effective evasion tactics are difficult for organisations to monitor, even when using advanced network threat inspection tools.

Application Programming Interfaces (APIs) are essential for retailers as they improve the eCommerce experience for shoppers. APIs connect consumers to data and information they need -- like inventory availability, product search, order fulfilment 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 cross-site scripting (XSS) (16.8%) -- all of which can generate costly breaches.