A month after a cyberattack hit Indigo Books & Music Inc., Canada’s largest bookstore chain is back online, though it’s still grappling with the fallout.
“A month has passed, but it’s not back to normal for Indigo,” said Charles Finlay, executive director of Rogers Cybersecure Catalyst at Toronto Metropolitan University.
“This reflects the complexity, severity and potentially devastating effects of cybersecurity attacks on large enterprises.”
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The company’s website appears to be back, although a notice suggests the online inventory is being updated. Consumers are always recommended to contact local stores to ensure that a specific product is in stock and available for purchase.
On February 8, the ransomware attack began and Indigo’s website and payment systems were taken offline.
The Toronto-based company’s temporary website is still limited to selling ‘selected books’, starting Wednesday, and current and former employees are preparing to have their personal information posted on the so-called dark web.
The bookstore chain said its network was hacked through ransomware known as LockBit.
The hack threw the company into turmoil as its e-commerce operations and in-store debit and credit card payment systems were disrupted.
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The bookstore managed to quickly restore its payment systems and soon after launched a temporary, navigable-only website.
The retailer recently revealed that it decided not to pay the ransom because it could not be assured that a ransom payment “would not end up in the hands of terrorists or others on sanctions lists”. .
“There’s a math that comes down to dollars and cents and risk and reward,” Finlay said. “Now we see what happens when you don’t pay a ransom.”
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Indigo declined an interview request for this story.
The company is not alone in being targeted by online hackers.
Sobeys’ parent company, Empire Co. Ltd., the Liquor Control Board of Ontario, or LCBO, and Toronto’s Hospital for Sick Children, or SickKids, have all recently been victims of cyberattacks, highlighting how serious the problems cybersecurity are becoming ubiquitous.
“Everyone is affected and sometimes the damage is much greater than expected,” said Robert Falzon, chief engineering officer at Check Point Canada.
“In the past, some organizations have actually chosen insurance as their weapon of choice for cybersecurity,” he said. “It was cheaper to insure against a major breach than to implement proper security and training. But that will start to change.
It’s unclear when Indigo’s website will be fully restored or how much employee data will be leaked online.
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Even a month after the hack, Indigo’s investigation likely still reveals the full extent of the damage, Falzon said.
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“It’s not over for Indigo yet,” he said. “They’re probably still figuring out exactly what happened.”
Meanwhile, retail experts say the biggest risk for Indigo is the potential loss of customers.
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While the loss of some online sales related to Valentine’s Day and now potentially March Break and Easter could be a tough quarter, they say the loss of customer loyalty is a bigger long-term threat.
“The stores are fully operational and in the grand scheme of things, that’s the most important thing,” said Lisa Hutcheson, managing partner at consultancy JC Williams Group.
“But the challenge will be trust and perception issues,” she said. “Some customers might take a while to come back to Indigo. They might be really nervous.
Indigo’s transparency throughout the cybersecurity crisis will go a long way to reassuring some customers, Hutcheson said.
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And a sale wouldn’t hurt.
“Everybody loves a sale,” she said. “Some kind of friends and family event might be helpful. But I don’t think it has to be a sale.
Extra Plum Rewards points to recognize customer loyalty or other offers could entice some reluctant customers to shop at the bookstore again, she said.
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Tamara Szames, Canadian retail industry advisor at The NPD Group, echoed Hutcheson’s thoughts.
“The promotions are very attractive to the Canadian consumer right now. However, is this a tactic to regain loyalty? It can increase sales and revenue, but if you’re looking to build loyalty and regain consumer trust, it’s really about doing your best.
Supporting employees through the breach, sharing with customers how they will protect their personal information, and being transparent about the process as they move forward will help Indigo earn and regain loyalty, she said.
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