LP Magazine

JUL-AUG 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

Issue link: http://digital.lpportal.com/i/1004777

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Page 43 of 68

spot a potential shoplifter. Warne said that in the United States, omni-channel fulfillment is providing new opportunities for items to go missing. This means retailers also have to keep a closer eye on their own associates. Impact of Shrink As the sources of shrink evolve, how are retail losses impacting the industry and its customers? Of course, when shrink gets out of control, it can hurt a retailer's bottom line, particularly for smaller retailers that might not have the budget to "absorb" shrink. This can affect the company at large, as well as its employees who might see their hours cut or their bonuses and raises eliminated. Theft can also impact customers, many of whom are gradually growing accustomed to being inconvenienced due to shrink, Keenan says. "High shrink does cause inconvenience to the customer— having to remove security tags to try something on, not being able to access products without an associate's help, or waiting in line longer as protective devices are removed or deactivated," Keenan explained. "In the past, there was always this concern about how you were coming across to the customer. Too much security meant that maybe a store wasn't safe. But I think our world is changing. Today, people understand. They see a security guard out front, and they appreciate it. I think today the need for security is understood by the customer, but it's still an inconvenience." Meanwhile, as many brands work to cut costs to remain competitive with online retailers, some are hiring fewer employees. This can also be an inconvenience to the customer when they are looking for help or waiting in long lines to check out. For those retailers being hit hardest by growing competition, Keenan emphasizes that shrink should be a priority for senior leadership—precisely because of the industry's tight margins. "When you think about low margins and the competitive landscape, if you do have high shrink, there is a profit opportunity if you can reduce it," he said. "All retailers accrue for shrink based on past results. If you accrue at, say, 2 percent, and you come in at 1.5 percent, all those dollars go back to the The study found that US retailers are more likely to be plagued by external theft and shoplifting than internal theft. When comparing verticals, fashion and accessory retailers had the highest rate of shrink. THE WORLDWIDE IMPACT OF SHRINK 43 LP MAGAZINE | JULY–AUGUST 2018 continued on page 44

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