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The 'golden triangle' for Loss Prevention

The Retail Bulletin’s Loss Prevention summit last week highlighted the crucial need for staff engagement in retailers’ loss prevention strategies.

GENERAL MERCHANDISE

The 'golden triangle' for Loss Prevention

The Retail Bulletin’s Loss Prevention summit last week highlighted the crucial need for staff engagement in retailers’ loss prevention strategies.

Delegates at the summit, which was sponsored by Vangent, were treated to a top-quality programme and were able to take away key strategy ideas from both retailers and industry experts.


A key point that emerged is that there seems to be a ‘golden triangle’ that loss prevention professionals have to create and maintain:
1. Ensuring the business has the right tools, infrastructure and procedures (incl. pre-screening of staff).
2. Ensuring that staff have been given the right skills and are supported and incentivised to exhibit the right behaviours.
3. Ensuring that every employee in the business (leadership, head office, and front-line) is engaged with loss prevention.

Eric Hutchison, Vice President, Risk & Talent Management Solutions at Vangent said that employee risk assessment can reduce the chances of internal theft,  fraud and staff turnover. He commented that according to research carried out by G4S Secure Solutions this year, 1 in 10 UK retail employees have stolen from their company. 
The research also found that Uk employers rated honesty and integrity as the most important characteristics required in prospective employees and Hutchinson believes that the most effective way to use risk assessment tools is to integrate them into the HR process.  Hutchinson also gave examples of where staff risk assessment had greatly improved the revenue bottom line.

Violent crime, anti-social behaviour and organised  shop theft gangs is on the increase, according to Mark Stevenson, National Loss Prevention Manager, Tates Ltd (SPAR). He was supportive of police efforts to deal with the crimes but said that investigating officers should get close to retailers, enabling them to understand retailers’ issues. This would enable the police to present a coherent and concise case to the CPS to avoid cases not being pursued due to complications. He added that police response time should be within 24 hours and cctv footage  examined earlier in the process. A scheme that Spar are signed up to is ‘Facewatch’ which is an online system that enables businesses to to report low-level crime to UK police forces in real time. This enables retailers to share information on crime patterns and organized gang activity both locally and nationally. He said that if all retailers registered for the scheme, then the police would have to buy into this idea.

Cash Controller Martin Harris at EAT has his own challenges, among which is the high level of casual staff who don’t have English as their first language, making them easy prey for ‘hustlers’.  His job is to raise awareness of the different theft methods used by both customers and staff which nearly always consists of cash theft. Making staff aware of the different ‘scams’ in operation is key to EAT’s loss prevention strategy and is an essential part of the company’s manager training which they attend every seven weeks. Harris is an advocate of cashless payment systems and will increase the use of smartcard technology  in all of his outlets to reduce cash theft by customers and staff alike.

Jenny Alleyne, National Field Operations Manager – Loss Prevention at the Co-operative Group said that loss prevention is all about ‘people’ and staff engagement and motivation in the right environment is key.
She said that 60% of in store incidents result in violence against staff. The company are engaging with staff using behaviour management techniques based in part on input and feedback from their staff. Emphasis is put on how shopworkers initially behave towards customers including their level of customer service. Real-life scenarios as told by store managers enable the training to deliver the right responses for many different situations which also alerts staff to what may happen so they are prepared for it. As a result of this approach Alleyne said that in a recent staff survey, 72% now feel that their personal safety is protected at work.

Regarding physical premises security, Chris Carter Brennan, Commercial Director at WebWayOne said that retailers can save time and money with digital security signalling. Alarm signalling can be a critical and expensive component of premises protection and the choice of technology and system governs how a site is protected and managed annually. 'Migrating to digital signalling saves money and improves security'.

Additional insights on loss prevention was provided by Professor Joshua Bamfield, Director, Centre for Retail Research who said that refund fraud is on the increase. He puts this down to the fact that it is relatively easy to carry out and the penalties when caught, are low. His presentation also showed another interesting aspect to shop theft is that many customers who steal almost consider it a ‘right’ because of high shop prices and  they ‘spend large amounts in store every week’! These people do not see themselves as ‘real criminals’ because they consider it as low-level and non-violent. He added that unless they are dealt with properly in the first place, these offenders can easily move on to more serious offences.

 

The sheer scale of today’s loss prevention remit is vast;from the implications of the Bribery Act way down the Supply Chain, through Data Security, to pre-screening employees and dealing with criminality and violence on the front-line. Loss prevention, far from being a ‘vertical’ business specialism, is a ‘horizontal’ discipline which cuts right across the organisation. The days of loss prevention being about security guards and CCTV – if it ever existed – is certainly long-gone today.

The biggest opportunity for loss prevention is also their business challenge – because unlike almost any other retail discipline it needs to cut right across every organisational ‘silo’: supply chain, operations, finance, HR, training, IT, trading divisions, and trading channels as well as forming close partnerships with suppliers, security services, academics … and ultimately the biggest partnership challenge of all – competitors.
Mike Finch, Head of Asset Protection, Best Buy Europe gave an example of how the Verint CCTV system he had installed also delivered commercially valuable customer insights and workforce management data … and this principle of mutual benefit will need to apply across all of the potential partnerships.

If you did not attend the Loss Prevention summit but would like to access the video of all the presentations, please contact Jane Turnbull at janeh@theretailbulletin.com

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