By Aclaimant

Apr 21, 2022

Few businesses have ever experienced the disruption that the retail industry has endured over the past several years.  First came the shift toward e-commerce, then a pandemic along with supply chain woes, talent shortages and intense cost pressures due to surging inflation.  

This unforgiving environment demands that retail risk management concern itself with much more than premises liability, workers compensation and property damage issues.  Let’s explore some key underlying trends that make holistic risk management a compelling priority for the retailing business.

There’s a New Talent Dynamic

Talent is more expensive and less available than at any time in memory.  Employee absences can have chaotic operational impacts. Workers are under-experienced, under-trained, over-stressed, and tempted by work-from-home alternatives not offered by the retail industry.

Making employees safe has never been as critical to talent retention as it is now. An employee with unresolved worries about workplace safety will never feel truly engaged and part of the team. The ambiguity of rules and regulations surrounding interactions with the public makes the communication between your risk team and employees all that more important. An effective risk manager is working in partnership with key business leaders, not just to ensure better management decision making but by being an informed voice for the needs and interests of employees. 

Public Expectations Are Evolving

Retailers have a very public face while customers have new tools to express their opinions and concerns to the public at large. There is no consensus of public opinion on many critical issues, so the policies and practices that might be demanded by some customers could be highly objectionable to others. In this frustrating dynamic the retailer needs to be deliberate, intentional, and highly consistent in its practices while being prepared to adapt to changing circumstances.

Notwithstanding this environment of mixed expectations, businesses have a high duty of care and will be judged accordingly in the event of a claim or incident.  Unless appropriate technology is put to use, it’s not plausible that businesses can ensure a consistent state of practice, promptly detect non-conformance and prove their actions in the event of litigation. The risk management practice can also be a prominent contributor to organizational efforts concerning corporate social responsibility (CSR) and environmental, social and governance (ESG).

Multiple Key Loss Exposures Are Worsening

The risks faced by the typical retailer are more complex and concerning than ever before. Supply chain management may come first to mind, but there are many others.  Some examples:

  • Brazen schemesters, thieves and fraudsters are using technology to game the system, putting employee safety and business profitability at risk .
  • The new era of local regulation demands new insights and new abilities to adapt to inconsistent compliance standards.
  • Law enforcement agencies may have different points of view regarding enforcement priorities and what self-help is expected on the part of the retailer, and uncertainty for when intervention is needed by the law may exist. 
  • Hardening market conditions have made property insurance more expensive.

The Consequences of COVID are Enduring

Even if COVID-19 is now of lessening concern, we remain at risk of a next pandemic. The public bears long-term scars from the experience of the past couple years, and the situation has become highly politicized.

While the uncertainties are many, retail establishments can be a breeding ground for transmissible diseases. As knowledge and regulations increase the standards to which retailers will be held are likely to ratchet upward, with notable jurisdiction-to-jurisdiction inconsistencies.

Cost Pressures Just Keep Worsening

Retail is a highly competitive industry, characterized by thin margins and rapid innovation. Those who aren’t keeping up with industry best practices risk a crippling cost disadvantage. Extraordinary inflationary trends place new pressure on consumers and suppliers alike. Not to mention that standards of sustainability and green practices are fragmenting the focus of business teams away from risk practices. 

In this troubling environment, there is a simple imperative to risk management: it’s cost-effective! The true challenge is to have the resolve to identify creative cost-saving opportunities and ensure they are optimized. Technology is a major component of an effective response.

Is now the right time for your organization to explore new ways to keep people safe and reduce the cost of risk? Aclaimant’s coverage-agnostic approach will empower the retail risk manager to prevent accidents before they happen, realize drastic productivity efficiencies, and secure better incident cost and duration outcomes for your business.

For more information please visit or contact us to arrange a discussion and demonstration of Aclaimant in action.