LP Magazine

MAR-APR 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.

Issue link: http://digital.lpportal.com/i/1096225

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Page 17 of 76

was too thin to accommodate average losses. "The low shrink was a huge advantage to the sales side. Because of the small pipeline for products we had, if losses had been 3 to 4 percent, we would not have been able to be in-stock and in-size," explained McBride. "We were able to be strong when we walked into the country and to maintain it—it's really a success story for our LP department and for our company to have such strong growth in an emerging market." In a 2018 report by KPMG on the top risks facing retail, the firm highlighted the shifting geography of the global retail marketplace. "Although the United States remains the leading force on the global scene, as markets and regions transform with emerging technologies, talent, and capital, a shift from West to East is underway." China is rising at a "breakneck pace," says the report. India is ascending. So it's noteworthy that—in the firm's dissection of international risk—one in three of the primary risk drivers identified fall squarely within the security domain. For example, the report warns retailers of threats from social and political instability, terrorist attacks, and delays in cargo delivery due to security considerations. The upshot is obvious: security and global retail are intricately intertwined. In today's evolving retail environment, effectively managing international risks doesn't just prevent incidents; it can make the difference between winning and losing in the global marketplace. And resiliency, a prerequisite for the success of an international retailer, extends far beyond crisis events. The retail companies that succeed going forward need LP's expertise to enable the business to effectively manage both predictable and catastrophic challenges. For a sense of which ones are top-of-mind today, LP Magazine spoke with several leading global executives. Strategy The very heart of an LP program—its strategic underpinnings—may need tweaking when applied to retail locations abroad, say experts, and must reflect local risks, standard practices, and available tools. There may be one way of doing things in the US, but investigations, theft prevention, and security posture may all demand a different approach in international store locations. Executing strategy can also be complicated, both by local cultural issues and technological differences, noted Hank Siemers, vice president of global retail security at Tiffany & Co. "We've found a problem of consistency in [point-of-sale] systems across countries. A lot of our global locations are in department stores, and they can have their own way for handling a transaction, so that's something that can pose a problem and make it hard to develop patterns and conduct exception reporting that a retailer might rely on," warned Siemers. He added that laws in some countries can require a different handling of loss incidents that involve employees. There are many such differences, explained Siemers, "and they can pose a problem to developing a consistent strategy across countries." Language poses an obvious barrier and so can differences in LP terminology. For example, "loss prevention" doesn't translate as well as "security" when liaising with law enforcement, government officials, and private security firms outside of the US, noted Siemers. The very core of LP, "inventory shrink," can also be a point of confusion, according to Kevin Ach, vice president for risk assurance at EPIC Integrated Risk Solutions and formerly senior director of retail loss prevention and safety for Office Depot. "It can mean something completely different in one country from another," said Ach. For example, damaged products may or may not be included in calculating shrink, he said. "[At Office Depot] we put in a lot of effort to make it so we could compare apples to apples and Hank Siemers Kevin Ach Global Retail Shrinkage by Country, 2017–2018 Country 2017–2018 Shrink as % of Sales Shrinkage Value (USD $billion) Rank, Based on Shrinkage % Italy 2.32% 2.73 1 India 2.13% 0.53 2 France 2.06% 7.30 3 South Korea 2.04% 1.56 4 Brazil 1.99% 2.34 5 Span 1.99% 2.77 6 China 1.96% 13.52 7 UK 1.88% 7.45 8 USA 1.85% 42.49 9 Russia 1.81% 2.52 10 Mexico 1.59% 1.62 11 Australia 1.47% 2.24 12 Japan 1.44% 6.20 13 Germany 1.43% 6.28 14 (Source: The Sensomatic Global Shrink Index, 2018) 17 LP MAGAZINE | MARCH–APRIL 2019 MAKING A WORLD OF DIFFERENCE

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