Global Retail Risk Outlook 2024

Overview

In 2024, the retail sector faces unprecedented challenges amid heightened competition and evolving market dynamics. Online and social commerce, coupled with advancements in artificial intelligence (AI) and the metaverse, are reshaping retail strategies.

Retailers are grappling with the relevance of brick-and-mortar stores amidst fluctuating consumer demand and economic uncertainties.

To understand how the sector is responding, we conducted a comprehensive survey involving 700 senior decision-makers across diverse retail segments, including supermarkets, luxury brands, and online retailers.

Our findings indicate that companies are strategically reallocating resources to adapt to emerging technologies, diverse channels, and the increasing demand for personalized and experiential retail offerings.

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While these shifts present opportunities for growth, they also amplify risks, particularly in reputation management and cybersecurity.”

Thomas Haddrill | Head of Broking CEEMEA

While these shifts present opportunities for growth, they also amplify risks, particularly in reputation management and cybersecurity. Despite these challenges, there's a sense of cautious optimism among respondents regarding future profitability.

Interestingly, the majority of retailers intend to maintain physical stores, while even online-only businesses are considering establishing a physical presence within the next 3-5 years. This highlights a collective commitment to blending digital innovation with traditional retail practices to navigate the evolving landscape effectively.

About the survey

Our survey was carried out by our research partner, Coleman Parkes, in October-November 2023 using phone-to-web methodology.

We received 700 responses from senior decision makers in large retail businesses based in Europe, North America, Asia-Pacific, Latin America, the Middle East and Africa.

Key findings

1. Retailers expect increased profitability: Despite tough trading conditions, 58% of retailers anticipate becoming more profitable within two years, with only 8% expecting decreased profitability.
2. Customer experience is top priority: 52% of retailers prioritize improving the customer experience as a strategic goal for the next two years, aiming to enhance shopping enjoyment and convenience.
3. Concerns over reputation risks: Brand and reputation risks, particularly concerning social media controversies, are a major concern for 50% of respondents in the next 3-5 years.
4. Physical stores remain relevant: Despite the rise of online shopping, 84% of retailers plan to maintain a mix of physical stores in 3-5 years, indicating the enduring value of in-store experiences.
5. AI and cyber risks: Artificial Intelligence (AI) is seen as a key opportunity for retailers, with 48% expecting it to revolutionize various aspects of retail operations. However, digital transformation increases cyber risks, with 43% of respondents identifying cyber threats as significant business risks.

What you’ll learn from this report

This report provides a comprehensive understanding of the current challenges and opportunities facing the retail sector in 2024, equipping you with valuable insights to navigate the evolving landscape effectively.

Here's what you can expect to gain:

Insights into retail risk alerts for 2024: Understand the key risks and opportunities associated with changing consumer preferences, technological advancements, sustainability initiatives, and workforce transformation.

Market overview: Gain perspective on the current state of the retail market, strategic priorities, customer experience trends, and the role of physical stores in driving consumer engagement.

Exploration of new technologies and transformation: Discover how retailers are leveraging innovative technologies to enhance customer experiences, optimize operations, and stay competitive in a rapidly evolving marketplace.

Analysis of the risk landscape: Identify and assess various risks confronting the retail sector, including brand reputation management, cybersecurity threats, supply chain disruptions, economic factors, geopolitical risks, and health and safety concerns.

Understanding ESG risks: Learn about the increasing importance of Environmental, Social, and Governance considerations in retail operations, along with strategies for managing sustainability challenges and regulatory compliance.

Insights into risk management and insurance practices: Explore effective risk management strategies, challenges in obtaining insurance coverage, and practical recommendations for mitigating risks and enhancing organizational resilience.

For specialist guidance in discovering smarter ways to manage your risks in the retail sector, reach out to us today.