Days after one of the worst security breaches in retail history, Target Corp. is scrambling to prevent further damage to its corporate reputation and regain the trust of some investors and consumers.
The nation’s No. 2 retailer was initially caught flat-footed, several analysts say, when a computer security blog broke news last week that thieves had stolen credit card information from an estimated 40 million customers. Since then, Minneapolis-based Target has launched a fierce public relations counterattack, with daily news briefings and a flurry of photos and statements designed to show the company aggressively responding to arguably the worst crisis in its 50-year-plus history.
“Thousands of Target team members, including our most senior leaders, have been working around the clock to help make this right for our guests,” according to a post on A Bullseye View, Target’s online newsletter. “From call centers to our financial services team to technology teams throughout the company, we will not rest until every guest need is met.” The post included several photos that showed CEO Gregg Steinhafel meeting with the company’s top executive team.
Public relations specialists say Target is trying to gain on a fast moving story that replaced last-minute Christmas shopping as the dominant retail-related topic of discussion. National and local media outlets jumped on a report Thursday by online journalist Brian Krebs about the widespread data theft, which occurred from Nov. 27 into the first weeks of December.
Although the U.S. Secret Service quickly confirmed it was investigating the theft, Target did not issue a statement until the next morning.
“The fact remains that Target was behind when this first broke,” said Jason Maloni, who heads the data security and privacy team for the Levick strategic communications firm in Washington, D.C. “Anytime you are not controlling the release of information, you lose the opportunity to cast yourself in the role of the hero rather than the villain.”
Target officials defended their response in an e-mail statement, arguing that the company was already working behind the scenes to inform authorities and collect accurate information.
“We immediately alerted the relevant financial institutions and began working with the appropriate law enforcement to ensure compliance with all state and federal requirements,” the company said. “We moved swiftly to responsibly inform our guests, educate them and help them understand what steps they can take.”
The company said Tuesday that it held a meeting with the offices of state attorneys general around the country. In addition, Target says it is partnering with the Justice Department and Secret Service.
“We want to be clear that neither entity is investigating Target,” the company said in a statement. Target is also warning customers about online phishing scams related to the credit card thefts. The company said Tuesday that it is in the process of setting up a dedicated area of its corporate website where it will post PDFs of all official communications to customers.
On Friday, Target released a video of Steinhafel apologizing for the theft. He also offered consumers free credit monitoring and a 10 percent discount over the weekend.
Target extended the discount to underscore that the issue had been resolved and that guests could shop confidently at Target’s nearly 1,800 U.S. stores, the company said.
“This was a crime against Target, our team members and most importantly, our guests,” the company said in a statement. “As we reflected on the situation, we felt like it was appropriate to treat our guests like we treat our team members.”
Target has a loyal customer base that is likely to stay loyal. Still, some found the company’s initial response underwhelming.
“Ten percent is nice, but it’s not really meaningful,” said Brian Kelly, a Chicago-based retail consultant and former top marketing executive at Sears. “I don’t think people were going to brave the weather and crowds just to get a 10 percent discount.”
Craig Johnson, president of Customer Growth Partners consulting firm in Connecticut, estimates that traffic at Target stores on Saturday fell 3 percent compared with the same day a year ago. Other retailers saw growth, he said.
“The credit card theft was the single biggest factor in the decline,” Johnson said. “The company did not do a premiere job in handling this crisis.”