Retailers warned of insurance roadblocks amidst increasing business risks

Despite impending risks, retailers are optimistic about new technologies and solutions.

Retailers all over the world fear risks impacting their businesses, however, 44% cited high deductibles, 36% historic loss experience, and 32% lack of risk or claims data as barriers, according to a WTW survey.

This leaves businesses dangerously vulnerable, warned WTW. WTW's Global Retail Risk Outlook 2024 also highlights the optimism among retailers about their prospects, particularly in the realm of physical stores. 

Despite facing significant challenges from disruptive forces such as social commerce, artificial intelligence (AI), and the metaverse, retailers are embracing new technologies whilst remaining mindful of associated risks.

A majority (84%) of retailers anticipate maintaining a mix of physical stores in the next three to five years, reflecting the enduring value consumers place on the in-store experience.

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Nearly half (48%) of respondents believe that artificial intelligence will revolutionize retail operations. However, with this opportunity comes increased risk, with cyber threats (43%) and rapid changes in technology (45%) identified as significant challenges.

Half of the surveyed retailers view the danger to a brand's reputation as the greatest risk facing the sector in the next few years. The prevalence of influencers and celebrity endorsements exposes brands to social media controversies.

Consumers expect seamless experiences, prompting retailers to prioritize technology-driven personalization and improved customer service. Over half (52%) of respondents aim to enhance the customer experience as a top strategic priority.

Despite the challenges, retailers are optimistic about their strategies yielding profitability gains in the near future. 58% of respondents expect to be more profitable within two years.

Key findings from the survey were retrieved from 700 senior decision-makers in the retail sector.