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Lessons from Latin America

I’ve spent the past few days visiting retail operations in Colombia with a client and was struck by the advantages of the staffing model here in this country and other countries in Latin America (LATAM).  While the model here is not likely to be adopted by retailers in the U.S., perhaps there are some good reminders and lessons.

Whereas in the United States where we have a mish-mash of employees working wildly divergent schedules, hours, and days, retail stores here are typically staffed with full-time employees who work six 8-hour days and make this their career.  In addition, approximately half of them work the first shift and the other half the second shift.  Staff turnover can run as little as 5% annually or less!

Think of the advantages of this model when it comes to commitment, product knowledge, workplace safety, loss prevention, human resources and the like.  Employees in this model “own” their part of the store and their responsibilities.  It is relatively easy to get a consistent message to all employees at the same time.  And, the stores we visited showed this through their merchandising standards, their employee engagement, and product knowledge.

Of course, it is easy to argue why this might not be practical in the U.S. or in similar markets, but it is a stark reminder to the challenges faced when trying to get consistent execution while managing part-time employees who might work as little as 8-10 hours in the week and where turnover can run over 100% annually.  In the U.S. model, how do you even reach your employees much less get them engaged?

This, of course, is the challenge my firm accepts when we work with our clients on their communication strategies and training programs.  Please let us know if you want to find out more about how we can help.

EAS Study Published: Journal of Applied Security Research

This year’s first edition of the Journal of Applied Security Research contains a case study that Adrian Beck and I authored on one apparel chain’s experience with switching from hard tags to sewn-in, soft tags.  The article highlights the importance of visual clues and difficulty of removal in creating deterrence.  An abstract of the article can be found at this link “The Importance of Visual Situational Cues and Difficulty of Removal in Creating Deterrence: The Limitations of Electronic Article Surveillance Source Tagging in the Retail Environment.”

While this study was conducted in only one retail chain, hundreds of locations were involved in the test and the results were consistent across geography, internal hierarchy, etc.  Additionally, similar results were realized in another specialty retail chain around the same period of time.  Hopefully, this article will add to the body of knowledge in our industry relative to EAS.

ECR Workshop on Self Scan Check-Outs: 27 January

My good friend, Adrian Beck from the University of Leicester, will be a featured presenter at the upcoming ECR Europe workshop on self scan check-outs and their impact on shrinkage.  Shrinkage and Self Scan Check-outs: The Benefits, Challenges and Opportunities is a seminar being staged by ECR Europe on Thursday 27 January at the Sheraton Hotel, Brussels Airport.

ECR Europe (Efficient Consumer Response) is a body of academics and loss prevention experts who have carried out extensive research on shrinkage in the retail sector, a problem that is costing $235 billion per year with retailers spending a record $46 billion trying to reduce the problem.

Self-scan checkouts are becoming increasingly common sight in retail and it is anticipated that the market will have grown three-fold between 2007 and next year.

As far as many profit protection teams are concerned, the jury is still out on self-scan and its potential impact upon the shrink figures.  Many struggle with the differentiation between convenience for shoppers and the ease by which potential store thieves can get away without payment or detection on non-tagged items.  Many see it as a huge threat to the business, while other LP managers believe it is an instrument to cut shrink.

The one-day workshop is to review ECR’s work on self-scan technology and present the findings from its latest research – the biggest ever survey of self-scan supervisory staff.

The workshop will also deliver retailer case studies on the business benefit of self-scan and the challenges of introducing the technology into the business. There will also be a perspective from the self-scan providers on how they are dealing with the threats of shrinkage.

To register, visit the seminar home page.

What Are Your Priorities for 2011?

As I was cleaning out some files last week, I ran across an article I had saved from the January 2007 Harvard Business Review titled, “What to Ask the Person in the Mirror,” by Robert S. Kaplan.  The sub-head for the article is “There comes a point in your career when the best way to figure out how you’re doing is to step back and ask yourself a few questions.  Having all the answers is less important than knowing what to ask.”  Kaplan goes on to list seven areas where you should ask yourself some questions to make sure you are on track with your performance.

It is a very good article through and through but one pull-quote particularly caught my eye – “The fact is, having 15 priorities is the same as having none at all.”  Wow, what a great way to sum up a major problem for individuals, managers, and organizations.  One of the biggest challenges we find in working with large organizations on their training programs is the inability to prioritize the most important issues.  Instead, there seems to be a tendency to try and include every issue, policy, or exception that may possibly occur during their entire working career in one training program – and it is usually given to them on their first or second day of employment!

Every individual faces the same challenge.  Wouldn’t it be better for you to focus on three or four top priorities in 2011 and ensure you get those accomplished than to focus on 15, 20, or more and fail at all of them?  A summary of all seven areas that Kaplan suggests you interrogate yourself on can be found here, but I’d suggest a read through this entire article that can be purchased here.

Repost: New Year’s Resolutions for 2010

As we come to the close of 2010, I have reposted below the resolutions I posted for this year for our industry in 2010 exactly one year ago today.  I think most of them still apply today for 2011…Your thoughts?

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As we come upon the new year, I thought I might humbly suggest some resolutions for the retail loss prevention industry for 2010.  I’m sure some of them will be controversial but they are all made in the spirit of moving our industry forward.  Please feel free to comment.

#1 – Don’t make numbers up

In our quest to quantify what we do, let’s be careful about simply pulling numbers out of thin air or estimating numbers and presenting them as fact.  In fact, there are several parts of our business where we simply don’t have accurate numbers.  Let’s strive to change that fact, not make up facts.

#2 – Don’t make the case for loss prevention by acting like Chicken Little

The primary message I have gleaned from news articles about retail loss prevention during this past year is that things are really bad.  I mean, historically bad.  We’re talking drastically bad.  ORC gangs are hitting all the malls, shoplifting is up because of the economy, on-line auction sites are siphoning millions, if not billions, of dollars via fenced and counterfeit goods, there are no laws on the books that help us address these issues, retail theft is funding terrorism, our budgets have been cut, senior loss prevention positions are being eliminated, cats and dogs are living together…wait, that last one was actually from the movie Ghostbusters

And, as a result, what has happened to shrinkage?  Well, if you believe the numbers in the National Retail Security Survey (see resolution #1 above), retail shrinkage in the U.S. came in at its second lowest level in the 17 or so years the survey has been done.  I say kudos to all the practitioners in our business who have continued to improve the way we do our business, who have leveraged technology, and have evolved their approach and response to the emerging threats listed above.

#3 – Demand that our industry associations fund research and education

I like our industry associations.  I participate in several of them.  I think they are well-intentioned and have expanded what they do for our industry over the past 15 years.  The staff members of the associations are hard working, helpful, and eager to serve the industry.  Their advisory boards are comprised of individuals who give a broad representation of the retail industry.  But, the one area where I think they need to step up is in the area of funding research and education in our industry.  The lack of rigorous study and research in our industry is largely the reason that we need resolutions one and two above.

There are models for how this could work and it does not have to be difficult.  The Europeans, working through the ECR framework, have figured out how to do this effectively with the process being driven by the retailers.  I don’t see any reason this can’t happen in the U.S.  However, this will only happen if practitioners demand it.  When I look at other large professional and trade organizations, they typically have more robust offerings to their membership in this regard.

#4 – Don’t create a new name for what we do

Retail security, loss prevention, assets protection, profit protection… I really don’t care what we call our industry (I know there are some that care passionately about it), but I do know that having multiple terminologies and nomenclature does not help others understand our profession.  Look at established professions like medicine, finance, IT, HR, and others.  By and large, they have established consistent labels for positions within their industry.  There is a clear distinction in medicine between a doctor, a physician’s assistant, a registered nurse, etc.  In finance, there is a clear distinction between a bookkeeper and a CPA.  I don’t hold illusions that we are going to reach consensus in 2010, but hope we don’t have more diffusion.