Loss prevention lessons learned and what to expect in 2012
As the year comes to a close, we took the opportunity to ask Steven May, President and CEO of LP Innovations, Inc., about what he learned in 2011 as well as what loss prevention and retail professionals can do to succeed in 2012.
How did you see retailers respond to the issues involving the economy?
Steven May: “Like many loss prevention/security businesses that serve the retail industry, I found 2011 to be at times both frustratingly quiet and, showing the promise of opportunity. I think many retailers held their breath in 2011 waiting for the economy to show clear signs of either getting better or worse.
Unfortunately, clarity in which way the economy was going to turn was sorely lacking. For every bright spot in a particular retail sector, we often found corresponding bad news from another sector. This uncertainty in the economy, along with political and social challenges, had many retailers sitting on the sidelines grinding it out. Many were trying to preserve as much cash as possible in case the economy turned for the worse.”
How did the economy and retailer response affect the loss prevention function?
Steven May: “The posture taken by the retail industry certainly had implications for the loss prevention budget that appeared to be constrained or even in some instances reduced. A common theme, I heard by many Directors of LP this year, was meeting the challenge of doing the same (or more) with less in 2011. However, I did see in certain instances spending on loss prevention increase, but it seemed to be with retailers with very specific characteristics.
Retailers that had made a significant investment in technology over the past decade had access to a wealth of data to help them make better fact based decisions. The Loss Prevention Director who used this data and applied comprehensive analytics was able to define empirical models with credible ROIs, driving down losses and improving their company earnings.”
What do you think will change or shape the retail industry in 2012?
Steven May: “I have read a number of recent articles by well known retail pundits and prognosticators suggesting that the retail industry should hold onto to their collective hats because 2012 will be a year of “change”; especially in the area of technology. The cost of technology over the past decade has become affordable for almost all retailers and has resulted in the collection of vast amounts of data. This tremendous growth in data will provide significant opportunities for those retailers who have the high level analytical skills to turn the data into actionable strategic initiatives.
Experts state social media and mobile applications are a couple of technologies that have been adopted by some retailers, while some remain challenged with how to integrate technology into their customer experience, promotional activities and POS functionality. Who ultimately comes up with the best use of these technologies and the corresponding data will greatly determine who will be winners in 2012.”
What do you think will not change in 2012?
Steven May: “What will not change in 2012 is the fickle consumer; still very unsure of future, continuing unemployment concerns, political and social conflicts, and a sluggish economy. What this means for the retailer is probably conservative budgets with an emphasis on applying resources to capture the fickle consumer with multidimensional outreach efforts like social media and mobile applications.”
How can a loss prevention leader play a larger role in their company over the next year?
Steven May: “For the loss prevention leader, 2012 can present a real opportunity to become a vital part of their company’s success or failure. Like the overall challenge facing retailers in turning data into actionable decisions, the loss prevention practitioner will require developed, advanced analytical skill sets to be successful and mine data from investments such as EBR/POS, Inventory, CCTV, EAS, Alarm, Merchandising, Audit, Incident Reporting and Remote Video Monitoring Systems.
The challenge for most loss prevention professionals will be on how to identify the sources of advanced analytical skills and how to apply them for the greatest return on investment. The results, however, will provide loss prevention with not only a clear strategic vision on how to reduce loss, but has the potential to benefit top line revenue.”
We are interested in your thoughts? Drop us a comment and let us know what you learned in 2011 and what you believe retailers and loss prevention professionals can expect in 2012.