The Game of Retail Risk: It’s No Game
Commerce drives the world. Whether conducting business online or a brick-and-mortar location, the marketplace brings together people and products in a way both enlivening and, in some cases, terrifying.
Retailers are emerging from specifically challenging times — the COVID-19 pandemic that fundamentally altered retail — only to confront new challenges and variants to old challenges. The ability to respond to changes in the market is only part of what’s required for success today. The ability to withstand other shocks to the retail system is just as fundamental. You analyze your strengths, weaknesses, opportunities, and threats for marketing. You should be doing the same for the overall health of your retail business.
The Unpredictable
If you weren’t aware that business was highly unpredictable before COVID-19, you are now. Few could foresee a circumstance where stores and restaurants were desolate and whole city cores were empty. And yet, businesses found ways to adapt.
Was the pandemic unpredictable? Not really. Although it was humorous at the time, the Centers for Disease Control and Prevention (CDC) created a plan for surviving a zombie apocalypse in 2011 to capitalize on pop culture. Its goal was to leverage something seemingly wacky to drive a level of awareness that would cause people to think about how they’d react to all manner of challenges. The reality is that there have been plenty of epidemic and lesser pandemic scares over the last couple of decades, but for a host of reasons preparing for such infrequent events doesn’t often demand our mind space amongst the 1000 other demands on our time.
What To Think About Right Now
There are probably a few items that should be higher on your list to worry about than a zombie apocalypse. So, getting straight to it, if you haven’t thought about how your business will handle any of these four potential problems, you should start to think about them right away:
- Cybersecurity. Retailers have long been the target of cyber-criminals and as we become more omni-channel and digital/physical focused, bad actors will only accelerate their attempt to exploit every possible vulnerability.
- Crime. Petty theft to organized retail crime (ORC) is nothing new for retailers. However, the increasing trend of criminal activities, compounded by the other environmental factors that reduce criminal deterrence or affect the availability of law enforcement, leaves retailers in a new, unpleasant place where they must find mitigating solutions.
- Natural and Manmade Disasters. It’s not your imagination: the frequency of disasters has not subsided, but the costs associated and impact to our interconnected infrastructures has continued to rise.
- Compounding Events. Remember that many of the challenges we face do NOT happen in isolation even though we train on or plan for them individually. Issues stack on top of other issues and impact the way we react to and resource them. Think pandemic + crime, hurricane + looting, cyberattack + HAZMAT, etc.
What To Do About It
First and foremost, retailers need to make sure the stores are open and customers are being served, whether zombies are lurching down Main Street, asteroids are striking the Earth, or the aliens are landing. Over the past few years it became clear that this meant adaptation by serving customers in new ways, such as launching or doubling down on curbside pickup, delivery from store, or more robust full-service eCommerce sites.
While all of that is happening, there are other priorities that require attention, like keeping your employees and customers safe. It’s insufficient to plan to keep the doors open if nobody is going to show up to shop or work. The efforts we take to create a safe and secure work and shopping environment will drive behavior.
Likewise, you need to keep products on the shelf and minimize supply-chain interruptions. Customers can be fickle and quick to source their items at another retailer. Being proactive in monitoring and adapting to variables that impact the supply-chain is important to ensuring in-stock.
These activities are just part of the greater puzzle of how to serve the customer. They are all also affected by risk elements that must be considered individually, as well as how they affect the puzzle as a whole.
Make A Plan
The three magic words every retailer should know are these: Make a plan. A lot of people hear those words and immediately shudder. They visualize endless reams of paper, stacks of binders, and an arduous process that produces a static result. Don’t fear. It’s not as much about the actual plan itself, but the thoughtful process the company goes through in considering its risks and what they are going to do about them. The output is a plan of action.
Thankfully, the days of endless reams of paper and static results are long behind us. Business is dynamic, and our plans should be equally dynamic, accounting for changes inside and outside of our company. Applications, like those from resilience technology provider Infinite Blue have streamlined planning for all sorts of contingencies, enabling your retail business to identify the key issues relevant to your vertical, your geographical location, and your financial condition.
The first step in preparing for the unexpected is to understand your risk landscape. This means understanding how risk occurrences impact your business, and knowing what is critical in your business and what is not. When you add asset-dependency mapping that articulates the relationships between your company’s people, technology, machinery, vehicles and other assets, you’ve created a holistic and realistic picture of your company to work from. You can then leverage this foundation to create all types of resilience-oriented plans and frameworks to address risks and vulnerabilities (large and small) as they impact your business.
Second in line is developing a capability to effectively read the risk environment in real-time. This enables you to manage risks as they occur. Better yet, this capability allows you the opportunity to get ahead of them to mitigate their impacts or avoid them altogether. As the world has become hyper-dynamic and data-rich, this is another place where resilience technology providers can power retailers to greater success in handling risks as they emerge.
Equally important in this equation is how companies train on and exercise their plans in order to ensure that the plan created represents a current and accurate framework for success. More important is to ensure that the employees and vendors assigned to execute the plans have practiced their roles, practiced together as a team, and have a clear understanding of what’s expected of them. The moment of the disaster is not the moment to learn for the first time.
Finally, take time for review and revision. Planning is an evergreen process, just as business is a constant state of change. People change roles, technology is updated, organizational structures are modified, and processes are added and sunset. Your plans should always represent the current state of the company and they require constant attention to be ready for the ‘moment.’ This is where resilience technology solutions can help streamline this process in order to keep you updated.
Your goal is to create a way to keep your business operating and recover from the disaster in a way that can prevent or moderate things that could kill it, everything from lost or delayed sales, increased expenses (e.g., overtime labor, outsourcing, expediting costs, etc.), fines, contractual penalties, and, perhaps the most fatal, customer dissatisfaction or defection.
Work Smart, Be Resilient
This is where Infinite Blue offers proven, powerful and flexible business continuity management (BCM) software that’s not only critical to ensuring retailer resiliency, but makes it possible to prepare for, respond to and recover from anything unexpected. Infinite Blue’s BC in the Cloud application provides a place to understand risks, map your assets, develop plans, manage live crisis events, recover effectively, and keep everything current. Sendigo, Infinite Blue’s mass communications solution, enables the company to promptly send critical notifications to teams when an emergency arises, allowing them to quickly coordinate and execute the response plans while others may be struggling to adapt, communicate, and take action.
Most important, Infinite Blue’s cloud-based solutions help retailers keep their doors open, coordinate needed information in a timely manner when the stakes are critical, makes leaders visible when workforces need to hear from them most, mitigate disruptions, and provide the most orderly way to prepare for a disorderly possible future. The out-of-the-box configurations make it easy to build your framework, but its flexibility in customization makes it easy to add specifics unique to your operation in your planning.
The world is full of risks and unknowns. Making sense of the environment and adapting is paramount to retail success. Leveraging technology to help accelerate your path and adapt to the future faster is the key to unlocking that success.
