How Can Retailers Best Show Resilience During Periods of Economic 'Disruption'?

The current economic situation in the United States, and globally, to some degree, is one of pronounced turbulence, uncertainty, and anxiety — a period of "disruption," as Forbes contributor Jill Standish wrote in a May 8 column.

Standish highlighted several key pain points for the U.S. economy. Among them: the anticipated price increases, ranging from 5% to 16% across a wide range of product categories, and the American retail sector’s dependence on imports to meet inventory needs, which make up 25% to 30% of these categories.

Standish also cited National Retail Federation data suggesting that stockpiling to get ahead of tariffs was a major concern, with 46% of consumers polled in a March survey indicating they were doing so. On top of that, retailers are facing operational hurdles — from rerouting and rebalancing sourcing to fulfillment risks and daily disruptions caused by sudden spikes in demand. That demand, however, may dwindle if macroeconomic pressures persist.

Standish then posed the question of how retailers should respond, dismissing the actions of cost-cutting and waiting for the storm to pass as temporary solutions, before offering a broad philosophical alternative.

"Instead, resilience and adaptability should be at the top of every retail executive’s agenda. That means a focus on being more agile and able to rapidly and repeatedly reset the business as the market changes. And that can’t be achieved purely through cost cutting and eliminating inefficiency," she wrote, before outlining five discrete categories retailers could focus on.

• Enterprise and financial resilience: A top-down look at the "full range of risks" posed in the near- and long-term view needs to be top priority, according to Standish. Scenario planning, in terms of an in-depth exercise, must be embedded at every level of the enterprise to ensure all levels are prepared for worst-case scenarios and how to deal with them.
• Operational resilience: Next came a call for retailers to fundamentally rethink and rebuild their workflows, from supplier relationships to cost structures and logistics operations. The Forbes contributor emphasized a hypothetical employment of GenAI to create "digital twins" — "virtual representations of machines, products, or processes" — to test the aforementioned response scenarios, bouncing responses to critical supply chain or emergent quality crises.
• Commercial resilience: "This is where hyper-personalization, micro-segmentation, and agentic AI developments will become increasingly important to optimize spending and enhance the effectiveness of brand offerings," Standish wrote, underscoring that retailers should avail of existing inventory to craft a dynamic marketing and promo plan to make sure they appeal to each individual buyer. If done correctly, according to her, this could shore up loyalty and drive long-term spend.
• People resilience: Another key point was the need to upskill staff to work effectively alongside AI, with Standish referencing Accenture data showing that just 27% of retail and consumer goods workers fully grasp the importance of AI integration in business operations. "Simplifying processes and embedding AI so that employees can work alongside advanced technologies is essential... shifting the focus towards data-driven decision-making, customer engagement, and supervising AI tools and agents," she wrote.
• Technological resilience: Once again emphasizing the integration of sophisticated AI into every aspect of the retail business team — from frontline to marketing — a spotlight was also cast on the importance of cybersecurity protocol. One slip-up can cost hundreds of thousands of dollars, or even millions, as customer trust is shaken and negative headlines swirl.

What can retailers do — beyond streamlining operations, upskilling frontline and intermediate-level staff, and incorporating GenAI/familiarizing all tiers of workers with its use — to ensure that their businesses make the cut as competition and macroeconomic forces conspire to make things all the harder? Certainly, the question is not an easy one to answer, but it remains one worth discussing nonetheless.