July 20, 2024 • 6 mins
New Zealand's retail sector is still reeling from shock after Friday's unexpected outage.
Businesses all over the world were impacted after a CrowdStrike update shut down transaction services for thousands of stores.
Retail NZ CEO Carolyn Young says it's hard to know if something of this scale could have been prevented.
"When something cuts down the line so quickly, it's very difficult to manage that when it's outside your control."
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Speaker 1 (00:06):
You're listening to the Sunday Session podcast with Francesca Rudgin
from News Talks edb SO.
Speaker 2 (00:13):
Retail across the country experienced difficulties on Friday, as you
probably know, and through it and through into Saturday, as
payment systems went down, Retail New Zealand was urging customers
to be patient. In Retail New Zealand CEO Carolyn Young
joins me, now, good morning. Were retailers prepared for this?
Could they be prepared for this?
Speaker 3 (00:34):
I don't know if anyone was prepared for this. Really,
It's not something anyone had expected. Obviously, a global IT
outage impacting you know, everyone across the globe, from airports
and airlines, to banks, to retailers to people at home.
It was a massive outage that had instantaneously and reminded
(00:55):
us how interconnected we are with each other today.
Speaker 2 (00:59):
Could something have been done to prevent the effect this
had on retailers?
Speaker 3 (01:05):
Look, it's hard to know right at this stage if
you could prevent something of this magnitude, But I know
that a number of the banks and the payment gateways
will be looking at, you know, what occurred and how
could something be looked at to ensure that it doesn't
occur again. But when something cut around the line so quickly,
(01:27):
you know, it's very difficult to manage that when it's
outside your control and you work on a platform like
Windows where that was impacted.
Speaker 2 (01:34):
Carolyn, what kind of ongoing effects will this have? How
many sales do you think we've likely been lost because
of this. I've been able to calculate that yet.
Speaker 3 (01:44):
You no, haven't been able to calculate that. You would
need to see some data around payment transactions and do
some analysis if we can get some daily transactions. Certainly
Friday night was more difficult than yesterday, that's sure. You know.
Friday night was a situation where it was unfolding in
front of us, and some payments were going through and
(02:06):
some weren't. In some point of system styles were working
and some weren't. So you know, it was a little
bit more to understand exactly what was happening and how
the impact would roll out into Saturday. And relatively speaking,
Saturday was a relatively smooth trading day, especially compared to
Friday evening.
Speaker 2 (02:24):
Yeah, yesterday, my producer was at a supermarket and I
was at a large retailer, and both had a selected
group of checkouts working or computers working, they were still
having to go through the process. Is that one of
the problems that it's just not a quick fix. It's
not like, oh okay, sorry, here's a new update, run it,
We're good to go. Yeah.
Speaker 3 (02:46):
Look, it's a really complex space, isn't it, Because you know,
if you take one part of them, if you look
at the payment system and the gateways that occur through
a contact list or credit transaction, it's not just hitting
one space. It's not just going to the bank. It's
going through a number of different providers. Is to ensure
(03:07):
that that transaction is completed, and so that means that
any one of those providers could be hashed along the way,
which would mean that the transaction doesn't complete. So, you know,
you reliant in a whole system of people and businesses
for the whole business to work. So that's what makes
it much more complex, And obviously people would have been
(03:28):
a little bit cautious about some of the fixes ensuring
that they worked correctly. You know it, people would have
been swamped on Friday and Saturday with helping people with
you know, the blue screen of death that a number
of a number of people had on their computers. So
just making sure that the fix that you did for
that blue screen of death was appropriate, because you know
(03:52):
that there's always opportunities when things like this happened for
scammers to come out and try and make more chaos, right,
So it's about making sure that the fix is actually
the accurate one and it's going to work for your business.
Speaker 2 (04:05):
And of course, Carolyn, whenever something like this happens, we
ask the question, are we too reliant on technology? Should
we use cash?
Speaker 3 (04:13):
Yeah? Well, look, cash is obviously king in a crisis, right.
We do know that from the floods in Auckland and
the cyclones that hit the East Coast last year that
you know, technology wasn't effective in those crisis situations. In
cash with king, So you know, it is helpful if
people do have an ability to have some cash reserves,
(04:35):
so if they need to get some essentials from the supermarket,
or they need some fuel or something, that they're able
to do something. But we recognize that not everybody has
to bear cash, but you can obviously still transact with cash,
so you could do some you can have some of
your regular payments that you pay with cash, so that
you're prepared for something like this, but it is sort
(04:55):
of really challenging. And you know, the f Transaction system
compared to the Contact List one, the old f POS
system does have the ability to work offline and that
does make their ability for retailers and essential providers to
continue to transact when systems go down cal And.
Speaker 2 (05:19):
There have been reports of aggressive behavior from consumers, which
really just sucks because we're all in this together. It's
not convenient for anybody, is it.
Speaker 3 (05:27):
Yeah, no, it's not. And people were frustrated on Friday night,
not really understanding what was happening and why transactions weren't
going through, knowing that they had money in their bank
account and you'd get a message saying that your transaction
was declined. I myself got caught up in that member.
I've quite dumbfounded as to why that happened. But I
just used another form of payment and that went through fine.
(05:51):
But people do tend to jump at the retailer rather
than try and think about what the solutions are. If
you don't know what the issue is at the time,
it's not helpful to blame someone and be aggressive around that.
So it was a little bit disappointing.
Speaker 2 (06:05):
Thank you, so much for your time this morning, Carolyn.
Please sure that was Carolyn Young there from Retail New Zealand.
Speaker 1 (06:12):
For more from the Sunday session with Francesca Rudkin, listen
live to News Talks it B from nine am Sunday,
or follow the podcast on iHeartRadio
You're listening to the Sunday Session podcast with Francesca Rudgin
from News Talks edb SO.
Speaker 2 (00:13):
Retail across the country experienced difficulties on Friday, as you
probably know, and through it and through into Saturday, as
payment systems went down, Retail New Zealand was urging customers
to be patient. In Retail New Zealand CEO Carolyn Young
joins me, now, good morning. Were retailers prepared for this?
Could they be prepared for this?
Speaker 3 (00:34):
I don't know if anyone was prepared for this. Really,
It's not something anyone had expected. Obviously, a global IT
outage impacting you know, everyone across the globe, from airports
and airlines, to banks, to retailers to people at home.
It was a massive outage that had instantaneously and reminded
(00:55):
us how interconnected we are with each other today.
Speaker 2 (00:59):
Could something have been done to prevent the effect this
had on retailers?
Speaker 3 (01:05):
Look, it's hard to know right at this stage if
you could prevent something of this magnitude, But I know
that a number of the banks and the payment gateways
will be looking at, you know, what occurred and how
could something be looked at to ensure that it doesn't
occur again. But when something cut around the line so quickly,
(01:27):
you know, it's very difficult to manage that when it's
outside your control and you work on a platform like
Windows where that was impacted.
Speaker 2 (01:34):
Carolyn, what kind of ongoing effects will this have? How
many sales do you think we've likely been lost because
of this. I've been able to calculate that yet.
Speaker 3 (01:44):
You no, haven't been able to calculate that. You would
need to see some data around payment transactions and do
some analysis if we can get some daily transactions. Certainly
Friday night was more difficult than yesterday, that's sure. You know.
Friday night was a situation where it was unfolding in
front of us, and some payments were going through and
(02:06):
some weren't. In some point of system styles were working
and some weren't. So you know, it was a little
bit more to understand exactly what was happening and how
the impact would roll out into Saturday. And relatively speaking,
Saturday was a relatively smooth trading day, especially compared to
Friday evening.
Speaker 2 (02:24):
Yeah, yesterday, my producer was at a supermarket and I
was at a large retailer, and both had a selected
group of checkouts working or computers working, they were still
having to go through the process. Is that one of
the problems that it's just not a quick fix. It's
not like, oh okay, sorry, here's a new update, run it,
We're good to go. Yeah.
Speaker 3 (02:46):
Look, it's a really complex space, isn't it, Because you know,
if you take one part of them, if you look
at the payment system and the gateways that occur through
a contact list or credit transaction, it's not just hitting
one space. It's not just going to the bank. It's
going through a number of different providers. Is to ensure
(03:07):
that that transaction is completed, and so that means that
any one of those providers could be hashed along the way,
which would mean that the transaction doesn't complete. So, you know,
you reliant in a whole system of people and businesses
for the whole business to work. So that's what makes
it much more complex, And obviously people would have been
(03:28):
a little bit cautious about some of the fixes ensuring
that they worked correctly. You know it, people would have
been swamped on Friday and Saturday with helping people with
you know, the blue screen of death that a number
of a number of people had on their computers. So
just making sure that the fix that you did for
that blue screen of death was appropriate, because you know
(03:52):
that there's always opportunities when things like this happened for
scammers to come out and try and make more chaos, right,
So it's about making sure that the fix is actually
the accurate one and it's going to work for your business.
Speaker 2 (04:05):
And of course, Carolyn, whenever something like this happens, we
ask the question, are we too reliant on technology? Should
we use cash?
Speaker 3 (04:13):
Yeah? Well, look, cash is obviously king in a crisis, right.
We do know that from the floods in Auckland and
the cyclones that hit the East Coast last year that
you know, technology wasn't effective in those crisis situations. In
cash with king, So you know, it is helpful if
people do have an ability to have some cash reserves,
(04:35):
so if they need to get some essentials from the supermarket,
or they need some fuel or something, that they're able
to do something. But we recognize that not everybody has
to bear cash, but you can obviously still transact with cash,
so you could do some you can have some of
your regular payments that you pay with cash, so that
you're prepared for something like this, but it is sort
(04:55):
of really challenging. And you know, the f Transaction system
compared to the Contact List one, the old f POS
system does have the ability to work offline and that
does make their ability for retailers and essential providers to
continue to transact when systems go down cal And.
Speaker 2 (05:19):
There have been reports of aggressive behavior from consumers, which
really just sucks because we're all in this together. It's
not convenient for anybody, is it.
Speaker 3 (05:27):
Yeah, no, it's not. And people were frustrated on Friday night,
not really understanding what was happening and why transactions weren't
going through, knowing that they had money in their bank
account and you'd get a message saying that your transaction
was declined. I myself got caught up in that member.
I've quite dumbfounded as to why that happened. But I
just used another form of payment and that went through fine.
(05:51):
But people do tend to jump at the retailer rather
than try and think about what the solutions are. If
you don't know what the issue is at the time,
it's not helpful to blame someone and be aggressive around that.
So it was a little bit disappointing.
Speaker 2 (06:05):
Thank you, so much for your time this morning, Carolyn.
Please sure that was Carolyn Young there from Retail New Zealand.
Speaker 1 (06:12):
For more from the Sunday session with Francesca Rudkin, listen
live to News Talks it B from nine am Sunday,
or follow the podcast on iHeartRadio
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