COVID-19 has had a dramatic, global impact on how governments, businesses, and individuals operate. Public health safety measures such as wearing a mask, or practicing social distancing were not the typical predictions for 2020 in late 2019, but almost a year into the pandemic, retailers are still adjusting to the evolving government guidelines, and public health concerns.
The unpredictable nature of the impact of COVID-19 has alone reinforced the heightened risk to retailers and the need to effectively respond and manage all facets of risk proactively, as well as reactively, in order to protect and maintain a brand’s reputation. From maintaining the health of a brand and internal morale to appeasing external stakeholders such as investors — retailers without an established risk management framework always run the risk of destabilisation from a number of fronts.
Now that operational decisions and COVID response to COVID have come under much scrutiny through the lens of wavering public health conditions, it’s more clear than ever that decision-makers cannot underestimate the potential consequences of an unestablished, and/or inflexible risk management procedure. Brands now risk losing customer loyalty by being defined by their external facing decisions.
For example, in early January, Paradiso Receptions faced intense backlash in response to breaching local mandates by hosting over 600 guests for a wedding venue that was only allowed to have 350 people. Beyond the $5,000 fine, the Fairfield wedding operator received negative media attention compromising the health of their brand.
The 360 of risk
Now that leaders are aware that the risk landscape has vastly grown and diversified, it’s more important than ever to take a flexible, 360 approach to mitigation and response. Leading retailers have shifted to provide various types of customer experiences to match their new needs. From enhancing their ecommerce presence to increasing the dialogue between the brand and customer, retailers are now paying attention to how one event, such as a fast-spreading wildfire or cybersecurity breach can have a meaningful impact across its functions.
The risk management function along with the notion of digital transformation has exponentially risen in priority making its way into boardroom agendas.
For much of 2020, retailers, and businesses alike, had little option but to be reactive when it came to managing impacts of the pandemic. However, as organisations have been forced to adapt, digitally transform and update procedures, there is no longer a viable excuse to not have technologies in place that enable leaders to be proactive. Retailers must be able to activate an informed response across functions to emerging risks or crises in a timely and confident manner.
The best way to achieve this is through adopting advanced technologies that support your risk management needs. From detecting emerging issues, to then making sure that key decision-makers across a business are well equipped for a coordinated response. The use of real-time data and analytics is absolutely vital to allow this. Both access and a fundamental understanding of the value of such technologies across functions will not only help to break the risk management silo, but also best equip each function to respond fast and effectively.
Adapt and overcome
Resilient retailers have certainly endured one of the most difficult periods of this generation. From lockdowns and people management to supply chain issues, data capture and storage and ever-changing health guidelines — there has been no shortage of crises to manage.
The major, impactful events of 2020 have changed how risk management is prioritised. Retailers are now having to invest in long-term strategies to deal with and assess risk, or otherwise risk being left behind by competition.
With the right tools, mindset and buy-in from organisations’ decision makers retailers can remain on top of risk management and ensure their most valuable commodity remains intact — its reputation.
Ed Pullen is director for Australia and New Zealand at Dataminr