Operational Risks


Operational risks are related to the daily operations, and the ability to fulfil obligations to customers. Operational risks can often be managed with internal mitigation strategies.

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Risk

12. Technical robustness and capacity
Risk that the technical systems are hacked/attacked. Insufficient security, or lack of ability to foresee new ways that systems are attacked or exposed to virus outbreak.

Risk for site breakdowns, or features directly connected to the site, such as payment systems. Can be a result of systems
Rating: Unchanged compared to last year

13. Dependency on logistical partners
Risk related to dependency on distribution partners and their performance
Risk related to default of partner of significant importance and risk related to poor performance by partner with direct effect on customer experience for Boozt customers.
Rating: Decreased probability and decreased impact compared to last year

14. Incident risks
Risk for fire accident
Primarily regarding the warehouse, where the implications would be significantly more severe than at the HQ.
Rating: Unchanged compared to last year

15. Efficiency and capacity warehouse
Warehouse efficiency
The business is depending on having efficient logistic infrastructure. With increased volumes of returns, the number of hours with need of manual work increases, with less ability to increase efficiency.
Rating: Increased probability compared to last year

16. Outsourcing of BFC operations
Risks arising from the setup of outsourcing stock picking/management Third party involvement in one of the most central operational procedures, that highly effect performance in meeting customer expectations.
Rating: Re-phrased from Suppliers and Partners. Increased propability and increased impact compared to last year

17. Product supply
A lack of product supply from widespread disruption to the supply chain in Asia and Europe.
Rating: New risk

18. Flaws in pricing or other data elements of the web store
Risks arising from implementing wrong prices in the offer to customers.
Rating: Unchanged compared to last year

19. Operational dependency on third party providers
Dependency risk on third party software and software updates and its implications on the Group’s operation.
Rating: Unchanged compared to last year

20. Non-competitive customer offering
Risk of not being attractive to consumers in the Nordic area, in terms of product offering, speed of offering, and conditions in general.
Rating: Unchanged compared to last year

Mitigation of risk

12. Technical robustness and capacity 
Boozt assesses and monitors the risk for the occurrence of different scenarios that affect the function of the webstores that Boozt operates. Our IT Disaster Recovery Plan prioritises roles and responsibilities and actions to mitigate disruption events. The webstores are monitored in real time and actions can be taken in minutes to ensure website functionality.

13. Dependency on logistical partners
We are in constant dialogue with our logistical partners and implement improvements to the customer offering continuously. Through this close partnership with several of the leading logistical providers in the region we don’t consider the dependency of a single partner to be critical.

14. Incident risks
Boozt assesses and evaluates different possible scenarios and has defined what actions to take if such events occur. Contingency plans are adopted and includes responsibility- and crisis management.

15. Efficiency and capacity warehouse
Strategic and tactical planning is performed to support the growth considering factors such as warehouse/logistics capacity, recruitment strategies etc. Group Management and the Board of Directors continuously review the business plan and the strategic and tactical planning continuously. The capacity can be expanded in a modular way securing high utilization at all time and flexibility around when to add capacity. As we have terminated the contract with the staff provider at BFC, we must be in close control until the contract expires.

16. Outsourcing of BFC operations
We have had a long term and well-functioning relationship with the contractor, who has been the contracted supplier of pick and pack services for Boozt since the business was started. Contractual terms reflect the need to ensure compliance with demands, growth plans and policies set by the Group, including values as stated in the Group’s Code of Conduct. As we have terminated the contract with the staff provider at BFC, we must be in close control until we take over the BFC operations January 1, 2021.

17. Product supply
Secure status as preferred partner through building long-lasting and mutually beneficially partnerships with supply partners. This should ensure prioritization if supply chain disruption occurs. Also focus on not being dependent on single brands.

18. Flaws in pricing or other data elements of the web store
Control of prices (to ensure minimum gross margin) before being set live. Strengthening internal control on gross margin performance.

19. Operational dependency on third party providers
Considering in-sourcing of the most critical dependencies, as well as securing SLA’s which can compensate the Group in case of events.

20. Non-competitive customer offering
Get overview of market trends via attending fashion fairs, monitor competition, monitor NPS score, and constant evaluation of our categories and product and service offering.

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