Whilst industries like financial services have spent years honing and perfecting areas such as risk management, compliance and operational resilience, it’s safe to say that the majority of retail companies have historically applied a ‘less-is-more' mentality in these areas. The focus has, understandably, remained mainly on competitiveness and profitability in the marketplace.
Until January 2025.
In the last decade, the retail sector has seen some dire consequences from various disruptions.
Whether it was a worldwide pandemic, the captain of a shipping tanker having a really bad day at work or an international trade war, it has been proven time and time again that retail depends on a worryingly fragile ecosystem.
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In 2024, the UK Corporate Governance Code announced several key changes, with Provision 29 considered the most significant. These changes all came into effect in January 2025.
To summarise the update, it requires boards to formally declare the effectiveness of their risk management and internal control systems, as well as increase stakeholders' accountability.
As a result, the retail industry faced a reckoning.
Brands, spanning from independent boutiques to global players, have faced similar challenges when trying to adapt to changes and increasing demands.
I’ve been working closely with retail customers and some major industry players since joining RiskSmart. The amount I have learned about the industry, and some of my favourite retailers, has been quite an eye-opening experience.
Provision 29 has forced governance, risk, internal audit and compliance into the spotlight within retail companies across the UK.
The timing couldn’t be better to talk about risk management in the retail industry.
It’s time for a retail reality check: risk management is rapidly evolving, and now is the moment to either jump on the bandwagon or get left behind, facing fines, inefficiencies, and the deafening silence of abandoned carts.
However, in several of my conversations, I experienced common pitfalls and challenges.
A central one being that Senior Leaders and Board Executives can often be uninvolved in the day-to-day of risk or have regulatory fatigue. Generally, risk and compliance work can be overlooked until the company faces fines for non-compliance.
Other trends I’ve spotted for brands worldwide include challenges around returns management, consumer duty, General Data Protection Regulation (GDPR), financial risks and further pressure from regulatory bodies.
Whether your company plans to transform digitally, enhance its Environmental, Social and Governance (ESG) practices to make more planet-friendly products or use delayed payment companies to allow at-home hauls, there are hidden risks behind every corner.
But conversations within the retail universe are very much still centred around the narrow theme of “avoiding fines”.
The thing is: risk is about so much more than avoiding penalties. When risk management is done right, it’s a competitive advantage that can bolster resilience and profitability.
Sparking a retail risk revolution, the UK Corporate Governance Code is driving more central retail players to take action.
Even Vogue (yes, the glossy fashion bible that usually features way too many Kardashian-Jenner sisters) is now talking about risk. It recently featured an article and whitepaper about risks that high-end brands encounter throughout the supply chain.
Regardless of your company being listed on a stock exchange, if you face risk head-on, you can make your company more operationally resilient.
But where do you even start?
There are two main ways to handle risk management:
As compliance becomes more complex, ambitious and evolves more rapidly, retail companies are moving away from basic tools like spreadsheets and looking for tools that simplify, streamline, and automate risk and compliance.
And RiskSmart is quickly becoming their system of preference.
In the last year, we’ve seen the number of retail companies in our sales pipeline increase by 140%, and we’re already helping retail giants with forward thinking-risk teams, like ASOS, Autotrader, JD Sports and Skyscanner, streamline their processes and use key risk indicators to stay proactive and anticipate risks ahead of time instead of waiting for the chips to fall.
Some of the benefits seen across our retail customers include:
By far, the most significant benefit our customers see is how it helps leadership align and gain confidence when discussing risk.
As Steve Folkard, Chief Risk and Compliance Officer at Jensten, puts it:
“RiskSmart engages senior leaders in risk management. It’s changed how people think about risk - something spreadsheets could never achieve - and helped cascade that mindset across the business. I wouldn’t underestimate the value of that.”
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If you’ve made it this far but still aren’t sure what might be the best solution for your retail business, that’s completely fine.
We’re here to help!
To make sure you get the best fit and get senior leaders in your company on board with implementing new tech, check out some of the resources below:
We can also help you improve risk culture and get started on building a more sustainable foundation.
To learn more about how our solution contributes, check out the Monavate Customer story.
Risk is no longer something retail businesses can afford to gloss over or delay. With the new regulations in place and the competitive landscape evolving, proactive risk management is quickly becoming a baseline expectation.
Whether you're running a prestigious fashion house or scaling an e-commerce disruptor, the retailers that flourish will be those who understand that risk isn’t just a compliance checkbox - it’s a strategic advantage.
Hopefully, this blog has empowered you to take steps towards replacing worries with more robust risk management practices.
Get in touch to learn more about RiskSmart