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Loss Prevention Doesn’t Have to Mean Sales Prevention

Posted on 8/2/12 10:00 AM

Over the years we’ve often heard Loss Prevention referred to as Sales Prevention.  This is usually in reference to merchandise protection and the different views of what that entails. On one hand, the merchant needs the product visible and touchable in order the sell the product. On the other hand, loss prevention wants to ensure that the product cannot be stolen or damaged so that it can be sold.  Which is the right course of action?

Merchants want their product front and center, bulked until the fixture is nearly ready to explode, and shown in such a way that every customer who passes will want to stop, pick it up, and ultimately purchase it.

Loss Prevention professionals often see this scenario and automatically their brains scream Shrink!  For some, their first instinct is to lock everything up (under glass, in a case, etc).  For others, the answer is “de-bulking” and securing the display.

So what happens when two crucial pieces of the business are so far apart?  Compromise of course.

When looking at how to maximize sales and the customer shopping experience while also understanding the need to protect the merchandise, several factors should be considered.

The Merchandise

The first step is understanding the type of merchandise to be protected.   How you protect yet sell will be vastly different depending on the merchandise. Fine jewelry will be protected differently than a pair of pants which will be protected differently than baby formula or cold medicines.  Ask yourself these general questions when considering how best to protect the merchandise.

  • What am I selling that I need to protect? 

  • What is the consumer desire for the item? 

  • Are there any legal ramifications to not protecting the item sufficiently?

  • What is the gross margin of the item?

While all are important, the last question may actually be the most important question to ask as it will help determine if energy should even be spent researching a solution.  If the gross margin of an item is high enough, the profit may actually cover the shrink of the item several times over and therefore, it is more beneficial to make the item easily accessible for purchase.  Conversely, if the gross margin of an item is extremely low, protect it to ensure it is available to a customer who sees the value in purchasing it.

Protection Methodology

There is also some compromise that can be made in the chosen method of protection.  Not everything has to be locked up or out of sight to be effectively protected.  There are wide arrays of protection devices in the marketplace today that can protect merchandise without eliminating customer interaction or even detract from the customer shopping experience.

Salesprevention resized 600Whether you choose EAS sensor technology, tethers/tie downs (either alarmed or not), locking peg hooks, jewel cases, or even RFID technology which can alert if items are removed from the shelf in bulk quantities, there is a solution for every need. 

In some cases, your solution may already be in place; your associates.  We sometimes forget or underestimate the effectiveness of associates to protect merchandise.  They are there, already in your store, already interacting with those who enter through your doors.  With just a little awareness and training, they can be a very effective tool in protecting your merchandise.

Teamwork

Supporting the needs of both merchants and loss prevention requires teamwork. Working together, understanding the needs of both business functions and being able to openly discuss, debate and determine what is best (even if you need to concede some points) will build a long lasting relationship. As a loss prevention professional, the best approach is to offer support to the merchandising team; offering suggestion on how to best protect the merchandise based on how they want to merchandise it.  Providing guidance early in the relationship versus making demands will create a stronger relationship overall.

It is important to remember that a solution exists for every situation. While everyone may not always agree, understanding each side; the buyer, the sales drivers, the visual team, and yes, even loss prevention, will help build a partnership within the organization that will, in the end, help protect your merchandise and maximize both sales and profit.

Written by Shannon C. Hill, CFI

National Client Services Manager

Topics: training and awareness, policies and procedures, Loss Prevention program and development

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