Category Archives: Commentary

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.

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.

Economic Crime Goes Up in Recession?

In the October issue of Security Management magazine, there is yet another article, “Corporate Crime in Hard Times,” that tries to tie an increase in business crime to the economic downturn despite decreases in violence and property crime over the same period.  As is the case with most of these types of articles, they rely on whether crime is occurring during the period (e.g. “35 percent of American companies said they had been the victim of at least one significant economic crime from August 2008 through July 2009”) and perceptions of executives (e.g. “..the majority of U.S. executives (53 percent), perceived that the most likely reason for their increased risk of fraud could be attributed to increased pressure during these difficult economic conditions”).

Everytime we go into an economic downturn, I know to expect calls from newspaper reporters and TV producers wanting me to say that there will be more theft from both shoplifters and employees due to increased financial need.  Of course, I refuse because there is no way that we can know whether this occurs since we don’t have measurements to this very issue.  As for theory, there are some research studies that suggest employees are less likely to participate in workplace deviance when it is harder to replace their job such as is the case when unemployment is higher.

Still, the article does make some excellent points about the importance of employee awareness programs and internal hotlines in combating internal fraud.  Also, there are quite a few references to the PriceWaterhouseCooper’s Global Economic Crime Survey.

National Retail Security Survey – 2009

The final report for the 2009 National Retail Security Survey has been published.  As previewed at this year’s NRF Loss Prevention Conference, the shrink results from this report are tied at an all-time low of 1.44% of sales.  Despite the “sky is falling” mentality reflected in many articles and press releases over the past year and a half, retailers are actually seeing a decrease in shrinakge.  This mirrors what I’ve been hearing from loss prevention executives across the retail spectrum and what I predicted in our NRF panel this year the day before Dr. Hollinger released his preliminary report.

The last three years of this report reflect three lowest shrink figures in the eighteen years of this study.  Maybe it is time we start to celebrate some of the success we are seeing in our industry and take some of the credit?  What do you think?