Given the current circumstances, it is expected that the growth story for the retails sector would continue in 2016. However, this growth potential will depend a lot on identifying risk attached to retailing and making sensible adoptions to tackle them, according to a report titled ‘Sense and Sensibility’ released by Deloitte in association with Retailers Association of India (RAI). In the past year retailers globally and in India have experienced wide range of triggers that quickly escalated into crises.
Some of the crisis that retailers have and could continue to encounter include constant disputes with various stakeholders, supply chain, Quality/Manufacturing process related Crisis, failures of adopted retail strategy, sudden exponential increase in demand, technology and industrial failure, cyber-attacks, financial crimes and other natural and man-made disruptions including employee relations.
“The mistake many retailers make is to focus their crisis planning on reactive measures. With a broad, lifecycle approach to risk awareness, scenario planning, and simulation, retailers can help take control of the process even when they don’t have control of events”, said Deloitte Spokesperson. “You can build in the resiliency that has the potential to turn unforeseen events into unforeseen advantages.”
In a flash survey conducted by Deloitte with a few companies in India, 71 percent believed that they had a well-planned document which considered managing a crisis. However these were interchangeably connected with existing Business Continuity Planning (BCP) and Disaster Recovery (DR) plans which possibly watered down the criticality of a Crisis Management response. Close to 50 percent of the respondents to the Deloitte survey were not sure or do not have a provision for information management during a crisis.
“Ideally, organizations should think of crisis management in terms of a cycle— moving from preparation to response to recovery, and then around again— applying lessons learned from one stage to the plans and processes that support the other stages. When a real crisis arises, a traditional business continuity plan may be insufficient, especially if it hasn’t been tested”, said Shree Parthasarathy – Senior Director, Deloitte Touche Tohmatsu India LLP. “Having a crisis management discipline in place can significantly reduce the financial, legal, and brand image impacts from a crisis event.”