Technological and reputational are two new risks that retailers must factor into their business continuity plans.
Last time, we introduced reasons why retailers need to pay particular attention to their risk profiles, and began looking at some of the most common risks they face. Other risks they should consider include:
Reputational risk in the era of social media. Increasingly, people are connecting to the Internet via their mobile phones, which means that they can go online to express dissatisfaction about a retail experience almost in real time. Social media firestorms can quickly get out of hand, so a robust crisis communications plan needs to be in place to deal rapidly with adverse comments on social media sites. It’s a good idea for the spokesperson to be relatively senior—the temptation to give the social media role to a young and possibly inexperienced person can backfire dramatically.
ICT failure. Retail is already hugely dependent on its information and communications technology (ICT) systems, from tills right through to the back office. In addition, retailers rely on ICT to collaborate with members of their supply chain and manage complex logistics. It’s therefore vital that a proper disaster recovery plan forms part of the business continuity plan—no ICT system, no business.
An additional (and growing) risk is the fact that most retailers have an online presence, which consumers use either for product comparison or actual purchase. ICT failure can literally turn out the lights of online stores.
Buildings, including warehouses. Natural disasters can compromise a retailer’s outlets or warehouses, and so imperil the business. But the risks are broader, and should include fire, particularly at warehouses, which can be somewhat neglected in comparison to the customer-facing outlets.
Employee injury. With large staff complements, retailers need to be extra certain that they are compliant with all the applicable occupational health and safety regulations. Again, warehousing operations operating to tight deadlines, and where heavy equipment like forklifts is used, are a particular vulnerability.
While this does not pretend to be an exhaustive list, it makes a good starting point for retailers. Contact ContinuitySA for help in identifying and prioritising your particular risks when preparing your business continuity plan.