The breach of Target’s consumer data in December had a significant impact on the retailer’s holiday season. In truth, with industry consumer foot traffic down over 14% sales weren’t going to be exceptional anyway. In addition, although I’m not familiar with the details of Target’s line of responsibility structure, the breach probably had little to do with traditional loss prevention roles.
There is however a lesson in the event. Loss Prevention does play a role in brand protection. Although most daily issues are not as public or large as a 70 million customer data breach, even the smallest bad news can travel fast—and wide. They say that a customer who has a negative retail experience tells on average nine people. That may have been true in the past, but my guess is that with the common use of social media, a single customer can reach a lot more than nine people and do a lot of brand damage with just 150 characters.
The demographics of social media use has shifted and that compounds the problem. There is a reason why the young are switching from Facebook to SnapChat, Vine and Instagram. The cause is the steady increase in Facebook users over the age of forty. The more “old” people posting, the less attractive the outlet is for their younger and hipper citizens. That over forty demographic happens to be the exact group every retailer, restaurant and grocer wants in their stores be it brick and mortar or virtual. It’s the demographic that doesn’t set fashion, but certainly sets the consumer spending budgets.
And the one thing we know is that the Baby Boomers are not afraid to complain. Issues like internal theft have always been a private resolution between employer and employee. Most companies choose to handle such events through termination and restitution rather than prosecution. Considering the vast number of dishonesty cases each year, we see little in the news unless the issue is large or relates to accusations of mistreatment. It makes sense to avoid a public discussion on internal theft. The consumer doesn’t want to shop at an establishment who has known issues of dishonesty. The same way a consumer will avoid a retailer who announces consumer data was stolen.
But as global communication becomes as easy as clicking an icon on a computer desktop or tablet, the threat that our brand might suffer grows. In the old days an employee’s use of a customers credit card was unlikely to be a public relations story. Today, that consumer just tweets the event or updates his or her status - “Darn employee at Joe’s Shoe Store used my credit card to buy a new television.” It’s that simple and the same can happen if they see sweet-hearting, have their gift cards stolen, their information or witness an altercation between an employee and a shoplifter.
Brand influence is harder to control because every customer has at least one social media account and all of them are walking around with a camera to snap pictures or video. And when things do go wrong, customers are first shocked and then outraged that in a technology rich world, companies don’t have better safeguards and the ability to if not prevent, then apprehend those responsible.
Loss Prevention efforts need to keep up with the change and manage the potential risk and damage. That means monitoring and early intervention. That means programs and protocols that ensure, well as they say, “what happens in retail, stays in retail.” Okay that’s not what they say, but you get the point.
The good news is loss prevention professionals and operations personnel have a great deal of technology on their side. Advances in CCTV monitoring, affordable live monitoring, exception-based reporting systems, and low-cost background screening, and social media tracking systems like LPI’s SIRA program, all provide methods to detect, manage, and resolve risk before it becomes a story for Yahoo’s front page.
Loss Prevention professionals often speak about the need to advance protection efforts. It’s a good discussion and a critical one because whether we signed up for the role or not, LP now plays a part in brand protection.
Ray Esposito, Sr. VP Strategic Development & Marketing at LP Innovations Inc