Retail is a fast paced and dynamic industry. Add to that rapidly evolving factors such as changes in consumer preferences, economic uncertainties etc. As a result, the retailer has to be on guard for several risks in areas such as in-store management, expense tracking, marketing promotions, location, brand image, price and quality. Additionally, the threat of cyber attacks within online retailing and the electronic payment framework is always a lurking danger.  Some risks that can hinder the flow of smooth retail operations may be:

1. Natural disasters:  

The influence of natural disasters on retailing cannot be more evident than what we encountered in the current Covid induced pandemic. Businesses had to cope with overnight changes in the process or face the risk of closure.

2. Data leakage  

The retail sector is highly competitive with everyone trying to grow their market share. In this scenario, the data becomes crucial for the retailer. Any leakage of the same may result in competitors taking advantage. Carelessness as well as deliberate action on the part of some internal employees may be responsible for this

3. Phishing and hacking :  

While online retail is very much vulnerable to hacking and phishing, even the brick-and-mortar retailer can suffer. Cyber criminals can breach the POS leading to huge losses before the incidence is detected.  

4. Data breach in e-Commerce websites :  

Data breaches can harm retailers in various ways. Hacked data can be used against the business. If the news of the data breach becomes public, the reputation of the brand stands to suffer greatly leading to a break in consumer trust.

5. Shoplifting  : 

Shoplifting is one of the most common loss faced by retailers globally.


A Pragmatic Risk Management Policy  

Retailers should have a risk management strategy with frameworks in place to minimize or eliminate risks as described above. A robust risk management system for the retail stores must entail:

1. Standard Operating Processes (SOPs) :  

Defining and documenting all the routine policies and procedures will guarantee that every routine procedure is carried out in the way that it is supposed to be. The managers can also use these documents as manuals for every day operations.

2. Automation : 

Retail management and auditing software can automate the whole process of essential retail operations. Cloud based software of Outmarch can manage every activity related to merchandising, stocks & inventory, etc’ efficiently. It also helps regulate the supply chain for up to date inventory record keeping.

3. Prevention of data breach and online scams : 

A strong anti-virus and robust server management mapping frameworks must be employed to prevent hacking, phishing and other unwarranted online scams that can seriously erode into the retail business. These issues can be completely prevented by using encrypted retail management and audit software .

In general it is worthy to note that going forward few if not all of the risks mentioned above would continue to grow. Taking advantage of software solutions such Outmarch will help take control of damages in timely manner and will further help the retailer in adopting efficient business process.