The retail industry continues to face unprecedented change. Developments in technology, economic challenges and an increasingly global supply chain are reshaping how we shop and the expectations of consumers.
A new report of the top risk factors cited by the 100 largest 100 U.S. retailers highlights the implications of these changes:
The cost of data breaches
In 2013, Verizon reported that there were 467 security incidents in the retail industry, confirming growing customer concerns regarding data breaches. 91% of companies interviewed expressed concern over the impact of litigation in addition to the impact on brand reputation and customer loyalty. The much-publicized breach at a major retailed, the abrupt departure of the company’s CEO and fall in earnings has many retail executives questioning their exposure.
Global risk management
As retailers increasingly look to source and sell internationally, 80% cited concerns with international operational risks, including complying with international laws and regulations like the Foreign Corrupt Practices Act. This has been compounded with news that a major retailer has spent $439 million in the past two years to investigate the possible payment of foreign bribes.
In addition to concerns with international regulations, federal regulations and compliance with the requirements of numerous federal agencies directly impact how retailers need to manage their third parties. A recent case involving environmental-related violations by the contractors of a major home-improvement retailer led to a record-setting settlement with the EPA. The case highlights the requirement for retailers not only need to be concerned with their inbound supply chain, but also their sell-side third parties including contractors, distributors and other retail outlets.
All of these risks are directly tied to a retailer’s ability to successfully manage its growing network of third parties and its supply chain – a daunting task in a highly competitive industry dependent on thousands of global third parties, and low margins.
Hiperos Offerings for the Retail Industry
Hiperos 3PM™ provides a holistic and highly flexible framework so you can finally be in control of your third party management and delivers an overall 360 degree view of your third parties and their regulatory, compliance and operational risk, so you can better protect your business. Most importantly, Hiperos enables you to manage your third parties and third party risk in the most cost effective manner available.