While the Justice Department investigates a data breach that potentially affected 40 million Target customers in more than its 1,700 stores in the U.S., investors in the second-largest retail company are holding tight.
The data hack is the second largest incident of its kind in U.S. history; T.J. Maxx’s 2007 breech affected 47.5 customers. Target’s shares, however, have fallen just 3 percent since the data theft was revealed, Reuters reports.
Target saw a 5 percent reduction in customer traffic even though it offered a storewide 10 percent discount to customers in the wake of the breech.
As holiday shopping got underway, customers scrambled to cancel their credit and debit cards and millions faced bank-imposed cash and spending limits on their debit cards.
The company’s “Buzz score,” a measurement of brand popularity developed by polling site YouGov, dropped by 35 points to -9 on Dec. 20, the day after Target’s announcement, reports the Huffington Post.
A Forbes survey earlier this year found that Target was the 21st most admirable company in the world.
Christopher Browning, a victim of credit card fraud, which he believes is tied to a purchase he made at Target with his Visa card on Black Friday, told the Daily Mail that he wasn’t able to get through to Target’s call center.
“I won’t shop at Target again until the people behind this theft are caught or the reasons for the breach are identified and fixed,” said Browning.
One of the company’s big mistakes was having shoppers learn about the issue first from the media instead of from the company itself. The story broke the day before Target had even posted an official statement.
But Target may have delayed the story from breaking to help stave off potential sales drops. It said that it identified and resolved the issue on December 15, when Target posted a notice to customers acknowledging that data was stolen as part of a breach that began over Thanksgiving weekend.
“Taking into account the fact that the fraud apparently took place for 19 days — a period during which Target’s support team must have received plenty of negative customer feedback concerning the issue – it seems a little hard to swallow that they were only able to notify those affected of the security risk this week,” writes Sam Belt for HubSpot.
Target’s recovery efforts lagged on social media. On Target’s Twitter and Facebook pages, many incensed shoppers complained about still not being able to access their accounts, being on hold for hours or not being able to call into the customer service line.
A banner message about the breech posted to Target’s website was easy to miss. Eventually the company triaged on Twitter and used a Facebook post linking to an instructional message on their website from CEO Gregg Steinhafel addressing Target’s payment card issues.
Steinhafel said Target will be relying on target.com, abullseyeview.com, corporate.target.com and its various social channels to answer questions and keep customers up to date.
The company has also started sending email notifications to affected customers, but the emails are not expected to be complete before this weekend.
Target faces continued challenges in crisis management and regaining customers’ trust. But the retailer does not appear overly concerned.
Like most corporations, Target’s priority is to maximize shareholder value. And it’s reputation will likely recover in the coming weeks. According to YouGov, it took four weeks for customers’ perception of Citibank to bounce back after a data breach in June 2011 and six to eight weeks for Playstation’s reputation to recover after a similar hack in April 2011.