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Target Store Programs: Why they really work

Posted on 10/2/15 10:05 AM

They go by many names—Target stores, Focus Stores, High Shrink Programs—all with the same purpose: To reduce the losses in our highest offender locations. The content of these programs vary in size and depth, but most contain similar components. The similarities makes sense since the most burdensome programs and the most stream-lined both work to create at least some reduction.

Target store programs may be the strongest argument at times for the “less is more” platitude. The truth is that if you understand “why” these programs work, then you can create the most efficient model. One that balances resources and time to desired results. And the secret ingredients are actually far simpler than one might imagine.

But before we get to the magic components, and there are two of them, let’s take a quick tour of the six basics of an effective Target Store Program.

  1. Full Audit: The first step is to use a full audit to identify the level of compliance and to analyze the impact of operational issue on loss e.g. Improper damage reconciliation, errors in shipping procedures, etc.
  2. General Loss Interviews: In the second step we identify potential dishonesty and gain a general understanding of the associates’ level of knowledge and training.
  3. Refined Policies: We develop special policies to increase or improve store controls.
  4. Special Audit with Increased Frequency: A unique or enhanced audit is developed to track compliance improvement and to increase store visits and measurements.
  5. Self Audit: Store management conducts a self-audit to maintain attention on issues and to improve operations.
  6. Self Reduction Plan: Store management identifies “most-likely” cause of high shrink and develops strategies for improvement. Strategies are a public document whose progress is monitored by DMs and Loss Prevention.

There are, of course, variations to these components and as stated the length and depth can be adjusted, but let’s answer the most important question: why do they work?

Process-wise the program components work to right-side misbehaving stores. The components work because they focus in on the three causes of loss: Internal, external, and errors. These programs identify specific issues and then implement procedures and processes to correct or improve those areas.

But isn’t that what our policy and procedures already do?

Yes, which means there is something else going on. Something that was missing during the period that the store drove itself toward bad shrink. And that is where the Target Store magic operates. And here is how—

Attend what you Intend works because humans are wired to focus on only a limited number of things in their perception. Although our five senses are in a constant state of activation and information gathering mode, our brains are efficient and a bit lazy. Consequently, the brain filters much of the incoming information and refines processing to pay the closest attention to things that are new or different.

The first secret to the Target Store programs’ success is that they place store associates’ attention on the issue of loss. The investment we make with the six components alerts personnel that these things are important. So by the very act of Target Store program placement, we immediately improve their attention to the issues. In addition, the increased frequency of discussions on the topic and increased store visibility, ensures we can maintain their attention to the matter.

Of course, attention is not enough to get the best results. I can pay attention to a baseball being thrown at me, but if I don’t do something…such as put up my glove…the results will vary from the ball going past me to catching the speeding orb with my face.

Which is why the second secret is so critical—Expectation.

When people understand the expectations, they tend to perform better. There is plenty of research on the matter. Researchers understand that when testing individuals, if they hint at the best choice in a test, the test-takers overwhelming choose that option—even when the option is clearly wrong. Most people are familiar with the Placebo effect. That is when someone takes say a pill, which is designed to make them feel better, the participants often do feel better even when the pill is nothing more than sugar.

When we place a store and its staff into a Target Store program the expectations are clear. We expect them to do better and to graduate from the program. We set up a set of standards and a time frame for improvement and magically…or not so magically…most graduate and usually all improve to some degree.

In a way, our Target Store programs give those involved the advantage of what is called the Self-Fulfilling Prophecy. We tell them, “here is a program, follow it and you will graduate the program and have lower shrink.” This prophecy is a powerful influencer.

In a land-mark study conducted by Rosenthal and Jacobson, student of equal intelligence, performance, and ability were assigned to two groups. The first was told that they were on the verge of great academic success and the second group was not. Although both groups shared the same abilities, the first group lived up to the expectation and performed significantly better on tests and assignments.

The implications of attention and expectation are vast. In terms of our Target Store programs it demonstrates why they are a proven and trusted method to reduce loss in high shrink/loss locations. It also suggests that the components themselves have some flexibility, if properly designed and implemented, to get great results without creating overly-burdensome, difficult to maintain programs. But perhaps the most powerful implication is, within the working of these programs, are important enablers that we can use year-round in all stores to improve shrink.

Consider the implications of getting all the results of attention and expectations without any of the work involved in specialized Target Store programs. 

Authored by: LP Innovations




Topics: Target Store Programs, audit development

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