Retail asset protection – guarding rupees and saving millions

By Sri Lankan standards, it is a hyper market. Located facing a main highway, it is an attraction for shoppers in a wider catchment area. The music was on up beat rhythm and the DJ was in full swing. Flashy sky lights added both colour and glamour in one go. Security officers were on a fast track, managing the dual direction customer traffic - to and from the parking lots. The front-liners were busy in serving their excited customers. All in all, it was a pleasant evening of family shopping in a branded retail locality.

Suddenly a volcano-like manoeuver erupts! A man with a bag full of shopping items in his hand – dashes out through the checkout exit. The puzzled crowd freezes. Two security officers give chase right behind the dashing man. To escape from imminent apprehension, the mystery man leaps onto the highway to reach the other side. Little did he realize the speed of the passenger bus in motion. He was knocked down by the bus though the driver virtually stood up on the break pedal. The man fell on the highway, seriously injured. The stolen shopping items were scattered all over.

This is not a scene from a drama, but the real-life fate of a shoplifter – a man who dared to collect the displayed retail items and run away without paying. And such real life dramas are not rare in retail shopping localities – be it household utilities, food, fashion garments or stationary marketing - that are better known as fast moving consumer goods - FMCGs.

Protecting the retail assets in shopping localities is one big roller-coaster challenge. Shop lifting is just a facet of the giant wheel. Imagine the effort one needs to keep a track on hundreds of core (item) classifications that are sub structured into thousands of mini classifications and brand varieties. And they are a fast moving population – from vendor to stores, stores to floor, floor to shelves, shelves to check outs and check outs to customers. Perhaps, the biggest portion of time and effort of the retail locality managers are invested to explore anti-shrinkage solutions – compared to the time they objectively spend on enhancing interactive service delivery and designing customer delight solutions.

Retail gurus name SECURITY as one of the critical aspects in their 6S’ formula. Security forms one ‘S’ as the others being sales, stocks, sense, etc. Surveys conducted globally into retail asset shrinkage suggest that 70% of the losses are supply chain & locality staff related, while a much lesser 30% loss is defined as customer and other elements related shrinkage. “Guard your own force and you guard 70% of your asset loss” is the simple lesson on offer.

The test for retail asset protection challenge begins at the time of receiving of FMCG merchandize at the locality store, or in absence of a formal store – wherever the locality receives the new stock intakes. It could be vendor deliveries or centralized delivery – or even a combination of both – the primary potentiality of the shrinkage is linked in there.

“Due to staff turnover, leave and absenteeism – there are tough times at the receiving bay. We are pressed to depend on someone available and perhaps inexperienced. It’s a huge quantity of merchandize that we need to absorb within a micro time line. We physically count them – though it is not easy – and often the quantity is (somehow) counted right. What the receiving boy has missed is the erroneous item codes. Finally it reflects as shrinkage in the process for sure”. That’s the worrying expression of a locality head who has gone through the mill of managing retail assets for years.

Once the received stocks are in the custody of the retail locality, the challenge is to ensure the protection of same against damage, climate fluctuation, floor pilferage, wrong price tagging or bar coding, expiry and point of sale – POS – inefficiency etc in terms of loss prevention. The food marketers find it even more challenging due to the risk of unpaid consumption – both by staff and customers. As one food retail executive statistically explained it, if 15 out of their 300 staff members consume a delicious (yet expensive) chocolate pack each, the loss of a day (only from that brand) will be around Rs. 2,500 which will reflect as a loss over Rs.900,000 at the year end audit. And that’s a portion of stakeholders’ ROI share benefit – fading in to subtle disappearance.

There are smart ‘shop lifter groups’ who enter retail fashion outlets in pairs of sandals and manoeuver out wearing brand new pairs of shoes – but unpaid - for which the locality service team is held accountable some day. The security cameras and other integrated electronic detection systems can assist in mitigating the asset loss risk, but there is always a SYSTEM BEATER somewhere down the aisle. It is applicable even to the online business transaction data capturing and reconciliation. The lack of it or weak links in the process only accommodates the system beater – from within - to commit a fraud. They are smiling assassins and often in the good books too.

The solution is pretty straight though difficult. Retail asset protection is every retailer’s business responsibility. Conversion of retail sales teams into VIGIL GROUPS with loss prevention skill education supported by sensible loss prevention designing - forms the effectively tested solution. As an anonymous verse alerts us – “ Shopping malls, car parks, fabulous displays and hard cash attract thieves and you have a 24 hours recipe for trouble ”. And troubles are nothing but betterment opportunities in disguise!!
The author is Strategic Security Specialist / Pragmatic Trainer & CEO of Strategic Security Solutions. He can be reached at – solutions@sltnet.lk