As hackers shift focus to third-party vendors, retail and hospitality firms face rising cyber risks that disrupt operations, expose customer data, and trigger legal fallout. In a recent RH-ISAC survey of CISOs, third-party supply chain attacks ranked just behind ransomware in perceived risk, outpacing other threat categories.
One Breach, Many Consequences
Retail and hospitality organizations process vast amounts of sensitive data daily, making them lucrative targets for cybercriminals. But instead of attacking them head-on, many hackers now favor a more indirect route – exploiting weaker security across the extended supply chain.
Recent attacks reveal just how easily a single vendor breach can cascade across an ecosystem. When attackers compromised Otelier, a hotel management platform serving over 10,000 hotels, they extracted 7.8 terabytes of data by infiltrating not just one system but numerous accounts tied to third-party partners. Similarly, at Blue Yonder, a ransomware attack disrupted backend operations, leaving some clients unable to run payroll or maintain shift schedules.
Financially, the implications are staggering. Global losses tied to software supply chain attacks are projected to reach $81 billion by 2026. Yet the toll doesn’t stop at revenue, companies also face reputational damage, customer churn, and regulatory fallout.
Phishing remains the most common entry point, responsible for 58% of all retail cyber incidents. But threats also stem from employee errors, such as downloading disguised malware or failing to patch outdated systems. These vulnerabilities, especially when unmonitored across vendor networks, are precisely what make the extended supply chain such fertile ground for attackers.
Security Now Depends on the Extended Network
Mitigating risk requires more than hardening internal systems. Retail and hospitality operators must treat vendor cybersecurity as core infrastructure, not external exposure.
Basic measures, such as patching systems, rotating credentials, enforcing MFA, remain essential. But education is just as critical. Frontline workers, including third-party staff, need regular training to recognize social engineering tactics. One misstep can unlock entire systems.
Equally important is assessing the security posture of suppliers. Regular audits, contractual controls, and real-time threat monitoring are no longer optional. Yet many vendors lack the technical capacity to meet enterprise-grade standards. Industry programs like RH-ISAC’s LinkSECURE aim to raise baseline security standards across the supply chain by onboarding vendors into a shared ecosystem of best practices, controls, and support. Such efforts don’t just benefit individual firms, they help secure the operational fabric of the entire sector.
Reframing Supply Chain Risks
The frequency and impact of vendor-driven cyberattacks highlight a structural blind spot in retail and hospitality supply chains. As operations become more digitized and interconnected, cybersecurity cannot remain a siloed IT function. It must be treated as an operational priority, embedded across procurement and logistics decision-making. The challenge is not only technical, it is organizational. Addressing third-party vulnerabilities requires shared accountability, better information flows, and proactive collaboration across the value chain.
