Target’s Woes Continue
Target’s troubles continue to mount, as the retailer’s own investigation into last year’s security breach has revealed that it was worse than originally believed. According to Target’s own statement on January 10, more than just credit and debit card information was swiped from shoppers who visited the company’s stores from late November to mid-December.
“At this time, the investigation has determined that the stolen information includes names, mailing addresses, phone numbers or email addresses for up to 70 million individuals,” reads the statement from Target. In other words, not only was the original estimate of 40 million as the number of people impacted by the heist off by about 75 percent, the type of information stolen was more expansive than originally believed.
Not surprisingly, the company’s holiday sales look to have been hurt by the furor over the theft of such a huge amount of customer data, which was first revealed on December 19. According to Target’s outlook, fourth quarter sales are expected to be down about 2.5 percent from the previous year and the company’s profit forecast has also been revised downward. In response to this latest revelation about the data theft, Target is both expressing remorse and offering some concrete assistance to customers.
“I know that it is frustrating for our guests to learn that this information was taken and we are truly sorry they are having to endure this,” says Gregg Steinhafel, Target’s chairman, president and CEO. Besides words, Target is also assuring that guests will not have any liability for any fraudulent charges made as a result of the security breach. Additionally, Target is offering free credit monitoring for a year to any impacted shopper.
While Target is scrambling to undo any lasting damage done by this high profile data thievery, there is evidence that the company still has plenty of work to do. Just three days after Target released its latest update on its security troubles, the research firm YouGov released its latest BrandIndex, which ranks companies according to consumer sentiment.
According to an article at CBS News’ Moneywatch website, Target has lost its longstanding ranking among the top ten brands. Based on thousands of interviews, YouGov’s BrandIndex now puts Target at number 21, a precipitous drop. “The fact that Target not only fell out of the top ten but out of the top 20 is a big deal, especially since the incident only happened in December,” Lance Fraenkel, head of BrandIndex, told Moneywatch. “This kind of drop isn’t something that happens often.”
Still, Fraenkel didn’t have exclusively bad news for Target. He lauded the company’s efforts to be transparent about the data breach and urged them to continue to communicate with customers. “Strong brands can weather storms,” he said.