Target customers received a scare when at least 40 million payment cards were illegally hacked during Black Friday weekend back in November. After the new year, 70 million customers additionally had their personal information stolen through their Target accounts. These major security breaches were the first of their kind in Target’s over 50 years of operation, and one of the largest in U.S. history.
Five months after the fact, Target’s CEO, Gregg Steinhafel, stepped down from his position this week. He held the position for 35 years before handing in his resignation and removing himself from the board of directors. The retail company received flack from customers and market experts around the nation about its lack of response to the security hack, and has also faced a significant drop in it stock and profits, according to ABC News.
In the wake of Steinhafel’s resignation, the Target security crisis has still not reached a satisfactory conclusion. The security problem remains unresolved and is now being investigated by the Secret Service and law enforcement officials.
As Steinhafel steps down, Target is also taking steps to ensure that this type of breach will never happen again. They have announced new security measures that include a chip and pin technology instead of the common magnetic strip that customers swipe at the register. They have also outsourced their store card to MasterCard, who will place Target’s brand on the new cards along with the MasterCard symbol. Target will become the first major retailer to do this in the country.
In the last few months, Target has also done its best to appease customers affected by the breach. They have offered these cyber victims discounts on products, and also incentives to continue to shop at Target, hoping to reclaim customers who might be discouraged by the lack of security.
But experts indicate that Target’s woes extend beyond the cyber fiasco, saying that the retail store was already losing profits, and too slow in catching up with mobile payments. The mobile device explosion in recent years has been supported by several large corporations that have made mobile online shopping available to consumers. Starbucks reported great success with their mobile apps, claiming that 14% of their profits were generated from these devices last year. Consumers find using these devices a more efficient, less bulky method of payment, and Target only introduced web-based purchasing years after other competitors.
Target’s expansion into Canada has also been met with criticism, and its success has not been what Steinhafel expected.
The 40 million people affected by the security breach continue to wait for an answer, and officials are saying that it may take a few more months to resolve the security issues that Target faces. While the new Target cards offer a more secure way of shopping in retail stores, they may not be able to erase the major hack from the minds of consumers, or remedy Target’s drop in profits anytime soon.
