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.
It’s amusing that entire loss prevention efforts rise and fall on a single number. Sure, the number tells a story but it’s just the “punch line.” In truth it is meaningless if we don’t know “how” we got to the number. It’s equally of diminished value if we have to wait for the number to provide explanation or excuse—“hey I don’t know which story I’m gonna tell until I see how good or bad the shrink is.”
Loss prevention has several complex and specialized processes, but it’s not necessarily a complex concept. Shrink, loss and profit erosion are easy to explain: Each is caused by a set of actions or inactions, but usually a combination of both. We may not be able to measure motivation or intentions, but we can certainly measure behaviors. And these measurements are the predictors of our loss prevention results.
We never have to explain great results. Poor results are another story. And if hope is your strategy for good shrink you’ll most likely be sorely disappointed. I compare devastating shrink to a heart attack. The two share many things in common. In most cases they are both caused by a combination of conditions: One part poor habits, one part avoidance, and one part denial. Who’s at the highest risk for a heart attack? That’s an easy diagnosis for even a person who has never been to Med School - Poor diet, no exercise and avoiding check-ups. So pretty much it is the same formula for predicting companies at a high risk of a retail heart attack.
But companies are made up of people but they are not people. The challenge is often “where to begin?” How can a company get a quick overview of the potential for such a disaster? Pretty easy—just watch our short video on the Retail Heart Attack or download the full version e-book.
Authored by: Ray Esposito