LP Magazine

JAN-FEB 2019

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.

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BUMPS IN THE ROAD 40 JANUARY–FEBRUARY 2019 | LOSSPREVENTIONMEDIA.COM E videnced by the most recent statistics, progress has been made against cargo thieves in the US. The value of stolen cargo is down. The number of retailers that report being victims has dropped. Busts have disrupted the activities of major theft rings. But in today's retail world—where the ability to ship anything from anywhere and to anywhere within a short time frame is increasingly paramount—that progress will surely be tested. As retailers' products travel more miles to find their way into customer hands—residing less often under the controlled confines of store walls and well-established LP programs—losses in the supply chain are amplified. Developments in the supply chain, which previously may have not raised an eyebrow, can become, quite suddenly, materially important to the retail loss prevention mission. Transportation networks, for example, are becoming more fragmented as each entity throughout the supply chain seeks to minimize its own costs and liability. So a typical shipment of retail goods has more hands touching it than in years past, and more hands increases the exposure of retail goods to loss, noted Glenn Master, loss prevention director for commerce services at Pitney Bowes and former regional loss prevention manager for Office Depot. "A retailer might have a contract with company X, but they in turn will use an extensive transportation network to manage that process all the way to a customer's doorstep," explained Master. "From a [distribution center] to a consumer, multiple companies will be touching that product, and every time there is a touchpoint, there is a risk for it to be lost or stolen." Moreover, as shipments get closer to the customer endpoint, it's likely that the carrier transporting that product will be smaller and less sophisticated, thus reducing the visibility of in-transit orders. Truth be told, cargo theft has never mattered all that much to retailers and LP executives, say some industry leaders. With contracts that make them whole again in the event of loss, diversion in the supply chain has always been more nuisance than priority. "But now, if you have thousands of customer parcels stolen from a truck in Burbank, by a driver five companies deep in the supply chain network, the cost to retailers is substantial," explained Master. In addition to the resources required to manage claims from all those disappointed consumers, there is the real risk that you've lost them forever as customers. The e-commerce transformation isn't yet complete, according to the director of loss prevention for a home furnishings retailer. Retailers continue to focus on removing customer obstacles, to facilitate purchases no matter when, where, and how shoppers want to make them. "It's about the customer experience and how you can get the product to them at their convenience—and we haven't seen the end of that evolution," he said. He added that it's important for loss prevention to be part of planning as retailers innovate, whether it is ship-from-store, order online and pick-up in store, or "into scenarios with autonomous delivery, Uber-like services, and other last-mile issues." Case in point: Kroger said in December that it has started delivering groceries via an autonomous vehicle with no driver from its Fry's Food Stores to homes in the Scottsdale, Arizona, area. Such developments completely transform cargo security models. Retailers are currently grappling with the new consequences from supply chain loss, according to Byron Smith, CFI, LPC, corporate asset protection manager for 7-Eleven. "It has become top of mind for retailers as sales change," he said. "It's being looked at as an issue of maintaining consumer confidence in that brand, whether customers are buying products in store or they're being delivered to them by a third party." If a product isn't in the store when shoppers go to buy it or it doesn't arrive when it's supposed to, that confidence can be easily shaken. That can have severe consequences for the retail business, suggested Smith, who is chairman of the International Supply Chain Protection Organization (ISCPO). The task is also growing more complicated alongside the increase in the number of direct international shipments that bypass traditional US carriers. "You can pretty quickly experience brand erosion from losses and delays from shipping partners," Smith warned, adding that loss prevention and asset protection leaders need to involve themselves in the supply chain process to align with its growing significance. As e-commerce takes on a greater share of traditional retailers' revenue Glenn Master Byron Smith The e-commerce transformation isn't yet complete, according to the director of loss prevention for a home furnishings retailer. Retailers continue to focus on removing customer obstacles, to facilitate purchases no matter when, where, and how shoppers want to make them.

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