For more than two decades, exception-based reporting (EBR) tools have been widely used by retailers to analyze point of sale (POS) and other business related data. Even though these tools have saved considerable time and resources in the analysis, detection and resolution of concerns, the use of these tools still requires time and resources. So, how does one determine the necessary number of analysts to properly analyze their exception-based reporting information?Read More
Everyone in the organization is satisfied, if not ecstatic, when final shrink results reveal that we have achieved the company goal. The shrink result, alone, seems reason for celebration and these good results would intuitively indicate the existence of an effective loss prevention program.
An unfortunate number of times, however, companies are frustrated when the next inventory cycle misses the goal or when shrink slips back to a higher percentage. In a search for answers, the most common responses to increased shrink are:
Even a highly focused and effective program will not prevent every store from having a shrink meltdown. A focused program, however, that maintains a clear connection between its components, execution, and results can accomplish three important objectives:
- Confirm that the program components provide desired results
- Establish and monitor the behaviors that create a rise or fall in shrink
- Determine when the issue is one of effectiveness versus resources
“Shrink” is a common term in the retail world. It is a term for the calculations that demonstrate the loss of merchandise in relation to our total inventory sales. We say “calculations,” plural, because there is some flexibility in how it is calculated and the exact nature of the relationship between those items lost and those items sold. Most loss prevention professionals prefer to discuss shrink in terms of loss as a percentage of retail sales, while many finance professionals like speaking in terms of true “cost.” In truth, as long as the reporting method remains consistent from year to year, the three accepted methods of Shrink calculations are all created equal.Read More
You may not immediately recognize the word “spork.” Perhaps you know it as a “foon.” It’s that inventive little utensil made famous by fast-food take out and camping trips. The spork is a combination of a spoon and a fork. An efficient and cost-saving invention that has been around since at least the eighteen hundreds (I won’t go into all the things I know about the Spork’s history at the risk of sounding like a geek).
Now this little tool is great in a pinch (or on the road or in the woods) but I’m going to go out on a ledge and make a guess. I’d guess if I open the utensil drawer in your kitchen that I would find lots of silverware. No doubt, two sizes of spoons, two types of knives and prob
ably two sizes of forks. I’d probably see that you could last a week in full supply without ever washing a utensil. And I’d bet that beyond the basics, you have a whole bunch of other interesting, though seldom used “specialty” utensils. An entire drawer of stuff devoted to doing one thing – eating. I’ll go a little farther out on that ledge and bet that in all that stuff, maybe…and that’s a big maybe…you have one “spork” still wrapped in plastic. That lone little guy is probably not with the silverware, but in that “other” drawer - The one where you keep all those condiment leftovers and take-out menus from your last fast food run.Read More
They say the road to Hades is paved with good intentions. If that is true, than I say most of the heavy road construction was completed by the “new year special committees.” Those business groups we form in January and February charged with special tasks such as POS rollout, Training Initiatives, or Shrink. The intentions are, of course, in the right place. Certainly, in at least the first couple of meetings goals are met…and then comes Spring…and Summer…and attendance and attention wane.
Now granted, I’m not a huge fan of committees. In my opinion committees are as the British politician, Sir Barnett Cocks said: “a cul-de-sac down which ideas are lured and then quietly strangled.” My distrust for such groups is not born out of dislike for being a team player. Team’s are critical to achievement—small teams. Small teams with a specific set of goals, that follow specific plans, and include specific and individual responsibilities—I call it managed creativity. My reason for a small team preference is that while evolution may make great leaps to achieve change, human goals are reached through small and incremental steps. The more people there are milling around, the more likely we are to lose focus and misstep. But this isn’t an article on the pros and cons of committees. It is about “attending to what you intend.” A premise that is much simpler in theory than in practice.Read More
As humans, we were born selfish. Our instinctual need to be the most important part of our own universe runs through all our veins, and rightfully so. Without “me” being the top priority in everything we do every single day, we would never survive. So, it should come as no surprise that our own life issues are carried with us at the top of our minds, everywhere we go- including work.Read More
It’s an interesting conundrum that although no one can guarantee great shrink results, bad shrink is easy to predict. It’s a case of we “don’t know what we don’t know.” In other words, one can never really be completely sure if an employee may have stolen, if unreported shoplifting is crushing our profits, or if people are confidently doing important things the wrong way. The reverse however is not true. The absence of important and critical behaviors is easy to detect. And in their absence, one can surmise that our shrink results will be a train wreck or that any positive results are going to be, at best, really fortunate luck.Read More
We can spend a lot of time discussing audits, shrink numbers and awareness programs, but there is nothing more frustrating than the unresolved theft issue. I’m not speaking of the “mystery” stuff where there is uncertainty as to the cause of the loss. Nope, I’m referring to the missing money or merchandise that by virtue of access and opportunity had to be an employee. Things like the dreaded missing deposit or empty back stock containers that used to contain our merchandise.
Their is something psychologically draining about “knowing” you have a dishonest employee problem, knowing they took “stuff” and knowing there is no way you can prove it. Sure you can interview the entire store, sure you can blame it on the employee who quit, and sure you can resolve to never let it happen again, but still you’ll taste bitter dissatisfaction. The interesting aspect of unresolved dishonesty is that it is usually accompanied by a big “I Wish We Had” moment. A mental…maybe verbal…rundown of the things we wish had been in place before the theft. That little bit of now elusive evidence that would have drawn a comfortable trail to the responsible party.Read More
For many retailers, yearly inventories are just around the corner…maybe even this week. In fact, you may not even be here right now or you may be too busy screaming “get those mark downs in” to have the time to read this. That’s fine, I’ll wait…. Okay maybe just bookmark it and come back later because what I’m going to share is important to your after-inventory plan.
If you’re a “formula retailer” in San Francisco (defined as 11 plus stores), you have probably heard of the passage of the Retail Bill of Rights. You can read more here, but in short, the law requires a number of things related to employee hours and pay, including predictable work schedules, better schedule notices, less “on-call” abuse, minimum shift hours, and access to additional hours. There is little doubt that some of these changes will come with a greater financial burden to retailers, but the trade off may be lower shrink.
Whether it is direct cause or simply reflective of the changing dynamics of retail, we know from the statistics provided by the National Retail Security Study (NRSS), or the University of Florida Report, as it is often called, that there is a correlation between the percentage of part-time workers and shrink results. As one would anticipate, the more part-timers making up a company’s workforce, the higher their shrink tends to be. It is not that the presence of part timers causes shrink, but rather three key elements that are pervasive in a part time work force.Read More