The New Retail Reality: Using Site-Level Intelligence to Build More Resilient Supply Chains in 2026

It's undeniable that global supply chains contain a multitude of ethical, labor and environmental risks, and that these are unavoidable in sourcing and procurement. What’s also becoming harder to ignore is the impact these issues can have on a company’s continuity and success.

From productivity losses and logistics delays to reputational damage and labor disruptions, these risks translate into daily operational, reputational and financial challenges for retailers.

Yet large portions of retail supply chains remain unmapped. KPMG research indicates 43 percent of companies lack visibility beyond their Tier 1 suppliers, leaving blind spots where serious issues go unchecked. Site-level SMETA audits uncover an average of 1,000 critical issues each week, from wage violations to forced labor indicators, including at lower-tier or subcontracted sites that are crucial to their customers’ supply continuity. Wage-related issues are present at 46 percent of audited sites, and 16 percent have problems related to excessive working hours.

These aren’t just ethical concerns. All are also operational risks that can undermine productivity, resilience, compliance and customer trust, triggering reputational or financial crises.

Across the board, expectations are rising in the face of ongoing market turbulence that shows no signs of abating. Stakeholders want clear, verified evidence of proactive risk management across multiple issues and supply tiers, scrutinizing not just what companies say but what they do. In this context, responsible sourcing practices — including deep supply chain visibility — become highly valuable tactics.

Visibility beyond tier 1 is no longer a “nice-to-have.” Retailers that demonstrate active efforts to find and fix the serious issues in their supply chains will stand out as more credible, trustworthy and resilient in a competitive, chaotic 2026 market environment.

The Power of Site-Level Visibility

Accurate visibility is the foundation of ethical and resilient supply chain operations. Yet many businesses still rely on aggregated, remote-captured or solely self-reported data that can obscure real on-the-ground conditions. This approach leaves retailers exposed, blind to the risk reality.

Remote data and assessments are great ways to begin, but this intelligence needs verifying. Headquarter-level, shipment-specific data and microscopic materials analysis don’t provide the details on operational practices, workers or working conditions necessary to accurately identify and resolve serious issues. This is where site-level distinction and in-person observation come into their own.

Site-level audits such as SMETA (the world’s most widely used social audit, now SSCI-recognized) provide a trusted, standardized way to assess working conditions and capture comparable data from diverse supply chain worksites.

These reflect differences even between worksites in the same area, with the same owner, carrying out the same activities. They transform “unknown risk” into actionable intelligence, especially when triangulated with other data sources, including third-party risk data and self-reported information. This enables retailers to see beyond tier 1, prioritize using detailed insight, identify gaps, and intervene before risks escalate to impacts.

Audits as Catalysts for Improvement

Site-level, in-person assessments are more than just compliance checkpoints and data-capture methods — they’re engines of progress, enabling both improvement and the evidence of it. For example, recent analysis of SMETA audit data reveals over 150,000 issues were resolved at worksites all around the world through corrective action in the last 12 months. Each one is an improvement in site management processes, labor practices or working conditions.

Our analysis also indicated that worksites with gender-balanced management teams have 38 percent fewer serious issues than those with imbalances, and that those supporting freedom of association have 30 percent fewer overall issues compared to sites that don’t engage with trade unions. These insights show that responsible business practices improve operational performance as well as protecting people, a powerful combination for risk management. It’s worth noting that experts, including the U.S. government, recognize freedom of association as one of the most effective ways to prevent severe exploitation, such as forced labor.

Each issue found and addressed helps retailers build more resilient, efficient and reliable supply chains. When delays, reputational risks or noncompliance can directly impact retail revenue, audits empower continuity, reputation and return on investment.

Meeting Rising Expectations From Investors and Consumers

While the regulatory landscape remains uncertain, and therefore unreliable for guiding supply chain strategies, investors and lenders are sharpening their focus on risk management in response to the economic, social and environmental turbulence seen in multiple markets. They seek assurance and will reward companies that can demonstrate in-depth oversight of supply chain risks, proactive mitigation and responsive resolution. This comes alongside a growing body of evidence that upholding human rights and commercial competitiveness are not mutually exclusive, as is often assumed.

A new report from UNDP and the World Benchmarking Alliance finds neutral-to-positive associations with improvements in human rights practices across six indicators of profitability and market valuation, and a statistically significant positive link between human rights improvements and return on assets (ROA). Ethical, sustainable practices evidently support more resilient supply chains, productive workforces and reduced disruptions, all features that investors value but will demand proof of.

Consumer expectations are also evolving in ways that make action more critical than messaging. While Gen Z continues to signal strong interest in ethical and sustainable brands, new research shows a widening intention–action gap: nearly six in 10 young consumers admit their generation talks more about sustainability than acting on it, and many still prioritize cost and convenience. This is a huge opportunity for retailers. Gen Z will be quick to reward brands that help them close this gap but will be quick to punish those that don’t. Meanwhile, associations with ethical and environmental malpractice in supply chains continue to be a significant threat to brand reputation, including consumer perception and, ultimately, their spending. This is yet another reason to offer credible assurance on sustainability.

High-Quality Data as a Competitive Advantage

As the value of multitier intelligence becomes ever clearer for a multitude of commercial objectives, retailers equipped with in-depth yet navigable data are better positioned to succeed in a macroenvironment of constant change.

While there are always challenges, tech-powered solutions already exist to scale and streamline supply chain due diligence; analyze vast, integrated datasets in seconds; and deliver both actionable insights and tangible evidence of progress made. Demonstrating effort to uncover and address supply chain issues, even before they’re resolved, is a far better story for consumers and other stakeholders than operating in ignorance. And the information gathered in doing this fuels both short- and long-term goals.

Jon Hancock is the CEO of Sedex, a global solutions provider of supply chain intelligence, assessment tools and professional services to empower sustainability and risk management.