Theory as Foundation?

What is the role, if any, for theory as a foundation for what we do in retail loss prevention?

First of all, let me point out that I’m not talking about theory in the sense of “Maybe if I do X, Y will occur…”  Merriam-Webster has defined this type of theory as “an unproved assumption.”  Instead, I’m talking about the other definitions that Webster’s offers up including “a plausible or scientifically acceptable general principle or body of principles offered to explain phenomena” or “the analysis of a set of facts in their relation to one another.” 

Secondly, I’m not talking about theory for theory’s sake.  Rather, I’m asking the question as to whether there is any importance of understanding the underlying theory assumptions, often unconscious, that drive our decisions on how we approach our business.  Let me illustrate for clarity…

How many times have you heard the argument advanced that if a retail store does not prosecute shoplifters that “word will get out on the street” and that location will be viewed as an “easy mark” by the shoplifting community?  A related argument is that by prosecuting employees who are caught committing acts of dishonesty, you will deter other employees from stealing.  Or, how about the argument that by using a visible, EAS tag on your products, you will deter possible shoplifters from stealing that same product.

All of these arguments pre-suppose the effectiveness of deterrence theory, a well-researched topic.  Now, not to put you on the spot, but can you name the three underlying factors that determine whether deterrence will exist in a given situation?  In case you are having a problem coming up with all three, here they are:

  1. certainty
  2. severity
  3. celerity

Most of us focus on severity as the key issue.  “If the courts would only take shoplifting more seriously and impose greater sanctions or consequences on those who are caught, shoplifters would think twice about committing this crime” is how the thought process works.  However, deterrence theory tells us this is not enough.  In addition, a potentail shoplifter has to believe there is a fairly high degree of certainty that they will be:

  1. detected
  2. apprehended
  3. prosecuted

If not, the severity of punishment is a non-issue because they do not believe it is a foreseeable consequence of their action.  How confident are you of the certainty of apprehension and prosecution of shoplifters in your stores?  There are several studies that suggest that very few instances of shoplifting are actually detected.  Or, let’s use the EAS example…how certain are you that the tag will activate the alarm at the exit and that an employee will respond to that alarm? Industry studies suggest that less than 10% of EAS alarm activations result in a response, so where is the certainty or severity that deterrence so depends upon in those cases?

Celerity is just a fancy, alliterative word that means, in this context, “how quickly will punishment be meted out?” if the person is apprehended.  If my actions are not likely to result in punishment or consquence in the near-term, I’m less likely to be concerned with that consequence. It is unlikely that we have direct control over this aspect of deterrence theory as the court system works very slowly.

None of this commentary is necessarily meant to suggest that I dismiss, out-of-hand, the value of deterrence in what we do in our industry.  In fact, deterrence is a key component of what we do in our profession. 

Instead, this is a proxy discussion for the importance of understanding our underlying assumptions for why we do what we do.  Do you think that theory is should be important to the practioner?  Harvard Business Review thinks so.  They ran an article a couple of years ago titled “Why Hard-Nosed Managers Should Care About Management Theory.” So, this isn’t about being “academic” or “theoretical.”  This is about producing results in the real-world.

2 Responses to Theory as Foundation?
  1. Colin Peacock
    May 19, 2009 | 3:55 AM

    Interesting, perhaps your points provide some of the underlying reasons that explain why there seems to be higher levels of shrink reduction with hard Vs soft tagging executions.

  2. wpalmer
    May 20, 2009 | 5:15 PM

    Colin, I think there is certainly merit to connecting the two. Adrian Beck and I will soon be releasing a case study on one retailer’s experience with this very issue.