So you have
a shrink problem?
By Kevin Plante
Director, Loss Prevention Reporting and Analytics
CVS Caremark
How many of us have started a new job or a new company and
realized that there is a problem with shrink? Let’s face it,
no one is hiring loss prevention professionals if there
aren’t problems, right? So your job really is to dig right
in and fix it. Whether you are a store level LP associate or
VP of a chain of stores – and everywhere in between – you
have to come up with a plan and execute that plan to drive
results.
What do you do first? You have options here and have to
balance those options among company culture, your
supervisors’ requests, your experience and what any data
shows you. Some things to consider:
1. Theft – Theft is
always part of the equation. Internal theft or
external theft, could it be different from
company to company? Maybe shoplifting is more
prevalent in the store or chain that you work in
than your last company. Why is that? Perhaps as
you are thinking about how to address an
internal theft problem and are paying attention
to the number of cases you’ve closed versus the
last person in your role. Perhaps you are asking
yourself WHY there is more internal and external
theft in your new company or store than the one
you worked for previously. Maybe training isn’t
stressed. Maybe EAS isn’t part of the LP toolbox
at your company or your store. Maybe CCTV isn’t
utilized like it was at your last company. What
can you change in your role and what change can
you influence. Maybe as you are catching
thieves, you are also working to fix problems
that CAUSE the thefts to occur. Making an
adjustment to how your business operates –
sometimes in small ways – can cascade into a
windfall that could prevent theft from
occurring. You’ll always have to deal with
theft, but if you can prevent some or most of
it, you are working as efficiently as you can.
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2. Product protection
– You listen to what people say to you about
commonly stolen items and you have your gut
feeling based on your experience. But what is
missing most frequently from inventory during
each cycle? If you work in a greeting card
store, it doesn’t help to know that greeting
cards are your number one department for
shortage. You know that. What you need to get to
is finding out WHICH greeting cards account for
the most shrink. Perhaps you find out that
greeting card shrink is higher in the spring
than in the fall. Perhaps you find that there
are historically more vendor returns in the
spring and you have a flea market that opens
each spring in the neighborhood. All good
information to help you narrow down what is
missing because you have a better idea of WHEN
it goes missing. If you can get down to product
level and can determine that Easter cards and
particularly Easter card sku 123456 is driving
your shrink, you can make decisions (or
influence decisions) on how to protect that sku.
Perhaps you lock that greeting card behind
glass. Perhaps you put a keeper or wrap on it.
Maybe you just limit quantities so you prevent
sweeping. Maybe you detail check each order
coming in and each order leaving from the vendor
representative. Do you have EAS or CCTV that can
help protect or track the product inside the
store? Ultimately, the more data you have on the
subject allows you to get granular with the
action plan to reduce the shrink. Whether you
work in an electronics chain or automotive, if
you sell product live on the selling floor, you
need to consider protecting it so you can
continue to display it while minimizing the risk
of losing it.
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3. Audits –
Operational Audits, Safety Audits, EAS
tagging compliance audits, High Shrink Store
Audits – Whatever your company has, these
audits look at the policy and procedure the
company has dictated down and reviews those
procedures to ensure they are executed at
store level. In Loss Prevention, it is
desired to have an audit program that looks
at shrink or safety causing issues more than
just “checklist” items. As you conduct
audits and train store management on how to
properly correct the deficiencies, ask
yourself if the question you just reviewed
looks at an issue that directly or
indirectly causes shrink or a safety issue.
If it doesn’t, find out how you can
influence changing the question to one that
would. If auditing is done correctly,
including corrective actions, shrink can be
reduced along with the number of cases (both
internally and externally) you find because
procedures are done correctly and anyone
acting out of the “norm” stick out.
Conducting an audit is not enough, however.
You should influence all you can for
ACCOUNTABILITY as it pertains to that audit.
If issues surfaced are not corrected in a
timely manner, the company culture has to be
aligned with an accountability program that
will either push a manager to do what is
asked of them correctly or work the person
out of the system.
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4. Partner with store
personnel to provide tips – You have learned
that although store management should have a
good grasp of what is going on in the buildings,
they don’t see and hear everything. Partnering
with store level associates to provide
information relative to theft cases or shrink
issues can be an option. Foster an open
relationship with free flowing communication so
that ideas surrounding shrink reduction or tips
on employee or shoplifter theft are reported.
Maybe your company has an anonymous tip line
that offers a reward for information. Leveraging
others to help you develop your plan is smart
business because there are lots of great ideas
out there.
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| 5. Analytics –
Knowing where to look for shrink issues and
what shrink opportunities are the biggest
ones to address is the biggest battle you
may face. Data will shine the light on those
issues and provide you guidance to interpret
where best to spend your time and resources.
Pre conceived notions based on your
experience in the past is good, but
validating it regularly with data review
ensures you aren’t missing anything and
continue to go after the “big plays” when it
comes to shrink reduction. Whatever systems
you have that pull information – be it POS
or inventory or sales, case data or audit
data – figure out a way to get reporting
from those systems. Every report tells a
chapter in the story and every new report
shows you something more about the shrink
picture in your store, your district or your
company. Read the reports carefully and
don’t be afraid to have others look at it
and provide you their interpretation of
them. If you pay close enough attention to
the data and look at it regularly, you will
know where your opportunities lie and can
intelligently attack each issue with the
confidence that you have facts supporting
your decision. |
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