When it comes to shrink reduction, one size does not fit all

2 Comments | This entry was posted in Events, Loss Prevention, Retail Companies

Loss Prevention Conference and EXPOWhether you run one store or one hundred, there’s no business too small to find the best techniques to reduce shrink and increase profit margins. Even when retailers are armed with the latest methods, the biggest factor in reducing shrink is often the resources store managers have available to achieve the greatest return on investment.

An experienced panel of executives provided a glimpse at how their loss prevention tools come into play in this important task. Taking note of some of the techniques shared by the loss prevention experts at bebe Stores and the Ascena Retail Group, the session was flipped to let attendees share how they leverage resources to overcome limits in staffing, budget and technological resources. Each table was mixed with retailers and solution providers of all sizes, and six tables volunteered to share their consensus on the best methodologies they used to battle shrinkage.

  1. Exception-based reporting: An email report sent from executives to store managers serves as a “one-stop-shop” to show when the larger, bulkier items were sold in-store. Managers are then asked to go and check the footage at the time of the sale and see how their employees interacted with the customers. The supervisors were also instructed to praise associates who would make the extra effort to examine the entire shopping cart for items potentially hidden beneath the larger merchandise, and educate those who did not, to do better at trying to identify those instances.
  2. Business acumen strategy: A reliable tool in the industry, a survey of your current employees helps executives determine if associates understand sound sales and operating procedures before bringing in the loss prevention professionals.
  3. Employee training and education: One table found that a “town hall” scenario allowed associates from other stores to interact with their retail brethren. Retailers with the means to have their LP teams meet face-to-face with associates find this to be an invaluable educational opportunity.
  4. “Out of the box” approaches: Undercover programs, such as LP-focused questionnaires, help executives identify the best asset protection programs to implement, and also determine if there are any suspicious operations on local and regional levels. A “Take 5″ process was another way LP practices could be woven into everyday routines and help these become habit.
  5. Integrate executive LP knowledge at store-level: To get around geographical barriers, some companies choose an LP “theme of the week” to email among their stores. A topic to underscore the theme is discussed each day to increase awareness and drive home loss prevention basics.
  6. Breeding a culture of honesty: Through the customer service lens, advise associates to ask general questions to engage shoppers and identify “mystery shoppers.”

What methods do you use to achieve the best shrink results with minimal resources?

Posted in: Events | Loss Prevention | Retail Companies and tagged , , ,
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2 Comments

  1. Posted August 10, 2012 at 3:50 pm | Permalink

    Overall some very good potential strategies in reducing shrinkage. As a loss prevention consultant I suggest to my clients that they utilize their associates as an asset. Too often many retailers mangers simply want a warm body to run the cash register but unfortunately they are missing out on the potential of utilizing an effective and low cost method of protecting their businesses assets. Our research suggests managers along with their employees formally trained in a Shoplifting Prevention Program will drastically reduce the level of overall theft.

    Here are four benefits of Shoplift Prevention Training
    1. Reduce Shoplifting and retain a higher degree of profits for the retail business
    2. Reduce internal theft. Employees that are part of the loss prevention process tend to police themselves more effectively. It also sends employees a clear message that the retailer takes all forms of shrinkage very seriously
    3. Helps to make staff members aware when an incident may turn violent
    4. The retailer will become known as a tougher target. Shoplifters including professionals tend to look for a good opportunity and will often repeatedly target businesses that are considered an easy target.

    All forms of retail loss are expected to continue to skyrocket, especially during tough economic times and retailers need to become more proactive.

  2. Posted September 10, 2012 at 10:41 am | Permalink

    One of the key objectives to any retail security program is preventing shrinkage throughout the system, from the time suppliers ship products through distribution centers and on to each individual store. While retailers are predominantly successful in securing merchandise until it enters their possession in the DC, it is precisely once the inventory is within their possession that it becomes vulnerable to a wide range of harder-to-thwart threats.

    Retail security professionals typically implement a basic security seal program to enhance accountability throughout the supply chain and reduce the risks. However, too many retailers secure bins, totes, boxes, and even trucks with uniquely numbered seals – but without an auditing system in place for validation. Such programs are merely window dressing, and far from a serious deterrent to unscrupulous employees seeking to help themselves to company merchandise.

    An effective auditing system insists upon a process by which the integrity of the seal is confirmed every time possession is transferred, usually as simple as requiring the receiver to confirm the security of the inventory, sign for it, and be held accountable for it.

    An audit trail of seal numbers, chain-of-custody transfer signatures, and corresponding inventory counts system needs to be carefully recorded and visibly checked by management to reinforce the message that every single inventory item matters. Demanding accountability encourages and rewards security-oriented employees, and has the added benefit of improving overall vigilance.

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