IN SICKNESS AND IN HEALTH mass-coordinated shoplifting events and risks from organized retail crime.
Supply Chain
While government mandates forced many retailers to close their doors, some also found online sales impossible because shelter-in-place rules forced distribution centers to close or because manufacturers closed shop. Yet for all the hardship and headaches the pandemic caused, one LP professional believes the pandemic could provide stores with valuable insight into their supply chains that could result in more efficient movement of merchandise in the future. Unlike localized storms or other events that often disrupt only a segment, the pandemic has pressure-tested entire retail ecosystems, which is “going to bring a lot of issues into focus, [and] processes are going to be scrutinized and cleaned up as a result,” he said. Some analysts see an acceleration in retailers turning to microfulfillment centers, which are small buildings abutting existing stores to facilitate online fulfillment.
Reports are that Walmart, Kroger, Albertsons, and Amazon are among those signing agreements with providers in the microfulfillment space. Prospects for microfulfillment centers were already good, and now it will be a boom, some analysts predict. Supply chain expert Maurizio Scrofani believes that a “squeezing or shortening of the supply chain on verticals that we may now consider to be critical” will be a legacy of the pandemic. “I believe we will also localize aggressively farm-to-fork supply chains,” he added. “Mode of transportation will continue to swing toward parcel as people increase online ordering and as it is becoming the main method of purchase.” Some analysts say the pandemic highlighted the problem of relying too heavily on one geographic area or on too-few suppliers and could spur companies to diversify to reduce risk in their supply chains. When merchants increase suppliers to fortify their supply chains, they also need to mitigate the risks that it creates, advises Sutherland. “This onslaught of new vendors requires
Intelligence-gathering tools are likely to seem like a wiser investment post-pandemic, as many retailers struggled with getting and acting on localized intelligence about the plans of health department or state officials. It’s the type of challenge that crisis event management platforms are designed to overcome—facilitating an organization’s ability to gather information, assess risk, locate people and places at risk, and take mitigation measures in line with the risk.
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nimble processes to properly vet smaller businesses to guard against fraudulent activity that could affect inventory or the risks for merchants and marketplaces,” she said.
Crisis Leadership
LP has experience turning crisis into professional opportunity, according to Karl Langhorst, “During the avian flu, loss prevention—in many organizations—was looked upon as an integral business partner in the pandemic planning process and in many cases gained a seat, or their seat was elevated at the corporate table.” A similar opportunity is being presented by the current tragedy, he suggested. “Disruption is the new normal, and loss prevention practitioners are being provided a unique opportunity to elevate our profession to a new level never seen before.” While learnings and subsequent business process changes from that previous pandemic surely helped prepare many retailers for COVID-19, others may have felt a bit like they were building a plane while in the air, according to postings on online forums. As retail organizations turn to postmortems of their handling of the COVID-19 crisis, some are likely to give themselves middling marks. The fact is, despite an increasing focus on resilience as a core business objective, many retail organizations have trouble managing low-probability, high-impact crisis events. Plans may not be the problem. Surveys show most companies have crisis contingency plans, yet crisis events routinely result in their collapse. According to “Are Sensation Seekers in Control? A Study in Crisis Preparedness,” research published in Risk Management (vol. 16, no. 1) by Zachary Sheaffer and Yael Brender-Ilan, inadequate preparedness and crisis response is a