Retail resiliency is being put to the test as we continue to experience frequent and variable crisesranging from Pandemic to Supply Chain disruption. In the existing retail reality, a resilient and nimble business serves well its stakeholders and customers. Currently,as risk management/insurance is faced with harder markets,there is a call toaction for the increased effectiveness of each insured in mitigating and controlling adverse impacts to the business operations. As mentioned by Beazley and other cyber insurance carriers in their research, US and UK leaders consider the technology category of risks as being one of the most pressing areas of concern. Forcing resiliency and transparency in all aspects of the operations is essential to ensure the short and long-term success of fashion brands.
For retailers, the frequency of recent catastrophic events resulting from natural disasters, reputational or human events such as civil unrest are top of mind. Risk management experts and business leaders spend a significant amount of time and resources preparing to avoid and respond to these events; but it has been proven that propercrisis management, business continuity and mitigation plans are key in gredients. It is important to have strategic procedures in place, exercise the plans and promptly engage with the right resources across the organization to appropriately respond to the adverse event endangering the business.
Recent CAT (catastrophic) losses and the hardening of the commercial insurance market sends a clear message to business and risk managers of the importance of improving resiliency for the business and its operations. Investing in secure technology, building security, and life safety controls in addition to processes is a must to differentiate your risk from others. It is of upmost importance the clear understanding of the digital network that facilitates the connectivity of internal and external participants and the security of these systems.
There are other aspects of preparedness that require effective engagement with a diverse group of business partners or ecosystems. From supply chain manufacturers and logistics partners executing properly to crisis management/emergency response partners acting quickly to mitigate, repair, and open retail operations to customers. Business interruption and disruption are top of mind for underwriters, brokers, and risk managers as they create or review business plans intended to protect the business, employees, and customers.
Failure to properly evaluate and invest in the required level of readiness fundamentally opens the opportunity for decreased competitive advantage and incremental operational costs ranging from insurance to unexpected business interruption events.
In conclusion, operational resiliency in retail is more important today than ever before. Companies that plan and quickly adapt to the internal and external risk scan thrive and succeed in any condition. To achieve the required level of preparedness, companies will need to proactively partner with both internal and external resources, create the necessary procedures, educate/communicate, implement systems and disaster recovery plans as the business needs change. Dynamic resiliency planning!