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Enterprise compliance for retail companies: Changing requirements
Acting on today’s risks to avoid tomorrow’s crises
The retail industry is facing increasing compliance risks, but many companies don’t examine the dangers of operating in today’s complex regulatory landscape until it’s too late—and the costs can be staggering.
The retail industry is changing, so retailers seek to maximize their efforts to meet the demands of a new breed of customer. With that, there are remarkable possibilities for growth. But, it also introduces a number of compliance risks that may impact your strategy, brand reputation, and the loyalty of your customers.
The pitfalls of operating in today’s regulatory and compliance environment
The truth is, many companies don’t examine the pitfalls of operating in today’s regulatory and compliance environment until it’s too late. Have you?
From sourcing products from a sanctioned country, to a tainted food outbreak, there are countless perils that can come crashing down when we least expect it. So when something does happen, don’t find yourself uttering those five words: “How did we miss this?”
Your reputation rests on the shoulders of your compliance management program. Because, getting caught up in the aftermath of an overlooked regulation can lead to a wide range of complications. A violation could be as small as a locked door to a fire exit, or as serious as your supplier not giving you the whole truth.
You can’t afford to ignore an industry immersed in compliance risk and let anything slip through the cracks. We need to design strategies that enable the aggregation and sensing of internal and external compliance risks to thrive in this new reality and create competitive advantage in the Retail consumer products industry.
The cost of compliance
The cost of compliance is always increasing. Compliance risk assessments, management plans, and talent all require resources…and that’s when things go right.
But when they go wrong, that cost is even higher. Fines, penalties, and litigation costs may add up to staggering amounts, and the reputational damage that extends from a compliance failure can drive further costs through impacts to share price, analyst opinions, and customer sentiment.
If companies were simply prepared with a strong compliance management program, these additional costs could be avoided.
Let’s look at the numbers. On average, the cost of non-compliance is 2.65 times the cost of compliance. Ultimately, preparation and prevention are far less costly than regret.1
If we establish an organization-wide risk management process and create multiple layers of defense, we can protect our businesses and learn from each other. Let’s remember this isn’t just about protecting our reputations and our shareholders’ interests. We’re also protecting the conditions and jobs for real people.
How Deloitte can help
At Deloitte Advisory we’re prepared for what’s around the corner. And, we are here to help. What got you to where you are won’t get you to where you want to go; let Deloitte Advisory equip you with the strategy and technology to guard your business and thrive in today’s volatile markets.
1The True Cost of Compliance Benchmark Study of Multinational Organizations, Ponemon Institute January 2011, p.8.
Did you see it coming?
Getting caught up in the aftermath of an overlooked regulation can come with a variety of complications. In an industry immersed in compliance risk, retail organizations need to design strategies to sense internal and external compliance risks in order to thrive and create competitive advantage.
The cost of compliance is always increasing. But when things go wrong, expenses can grow exponentially. And the corresponding reputational damage that extends from a compliance failure only adds to it.
An organization-wide risk management process, along with multiple layers of defense, can help your retail company avoid unforeseen enterprise compliance risks and the financial implications that follow.
Enterprise compliance services
Deloitte Advisory's enterprise compliance services is a centralized, coordinated approach to ethics and compliance program design and assessment, one that cuts across multiple business units within an organization. To design and implement an effective and efficient enterprise-wide ethics and compliance program, retail companies need to create and maintain the people, processes, and technologies to address industry regulations. Deloitte Advisory’s understanding of these issues can help chief compliance officers—and other compliance stakeholders—bring greater value to their organizations.
Acting on today’s risks to avoid tomorrow’s crises
As many retailers know from recent history, compliance failures can lead to catastrophic results for the company, executive management, and the board. But the impact extends far beyond immediate value erosion—it’s personal now. Damage to a company’s brand can often take months or even years to repair, and could have devastating effects on retail sales and market value.
Understanding your compliance risk exposure is the first step in preventing these high costs of non-compliance. Download the full report to learn more about the critical questions you should be asking about your compliance risk and the programs that could help mitigate it.