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 18 of 76

MAKING A WORLD OF DIFFERENCE measure shrink consistently across the world." "It's absolutely a challenge; you can't just cut and paste," agreed American Eagle's Scott McBride, citing cultural variations from country to country and differences in compliance and legal issues, and in standard business practices. He said it took a long time and significant effort to develop an LP program that was both global and had appropriate localization, and that being present in the country was an important impetus. "It was important to go in and actually spend time on the ground, to change the programs, and to have time to leverage the other departments that were doing the same thing—legal, HR, investigations—as well as contractors and vendors," said McBride. Tiffany & Co.'s Hank Siemers made a similar point and noted the strategic value of getting guidance from local attorneys, local police, and government agencies. For Debbie Maples at Gap, approaching issues from both micro and macro perspectives has helped spur LP success abroad. She suggested that LP executives need to understand the particulars of how theft prevention is applied locally as well as examining economic pressures from a company's shrink perspective, and refining in-country strategy while staying in sync with a global philosophy. "It's all about understanding how a global program relates to local challenges, and applying your global strategy with a local add-on," she said. With a presence in sixty countries around the world, "it has become normal life for us." Finding that balance can be more difficult than it sounds, however. Aligning security with risk in the US is easier than in many places around the globe, where there is often less clarity around threats and crime trends. "We do additional due diligence to learn what is normal for this environment," said Maples, suggesting that local retail security norms provide a critical baseline from which strategy can then be adjusted. "It creates havoc if you don't know what the norms are," she said. "So I think being highly connected to what other retailers are doing to protect product is important—to assess if you are in line or out of scope with what is happening." She cited the example of deploying uniformed guards in stores, which may be off-putting in high-end shopping districts in some countries but commonplace—and expected—in others. Going into a country, even if an LP team thinks such visible security seems like overkill, Maples thinks retailers are better off deferring to local norms to start. "I do think it's important, when going in, to be trusting of the local security standards. Otherwise, the risk will migrate to you," she said. "It's easier to pull back and adjust the resources after you're live." Benchmarking also plays a critical role in international operations, Maples suggested, so LP back "in the mother ship" understands how a particular program or technology is impacting shrink when applied in a new environment. It's not uncommon to experience different results, said Maples, "and it's important to investigate why solutions aren't translating and what additional support may be needed to fix it. Benchmarking is really important to drive an effective strategy." Logistics For LP executives with global supply chain security responsibilities, typical problems are often amplified. The risk of criminal attacks against goods in transport is often the same—or higher—while traditional loss mitigation may be absent. "There are enormous additional challenges in managing supply chain in certain countries," explained McBride. For example, "As a company doing business in Mexico, you hold 100 percent of the cargo as it moves through the supply chain—you can't get cargo vendors to take a freight claim." He tracks the unwillingness of today's vendors to accept skin in the game—including brokers, expeditors, and shippers—to the kidnapping industry that boomed in Mexico several years ago. When Mexican officials finally made a concerted effort to stamp out rampant hostage-taking, criminals turned their attention to cargo shipments, where thefts don't garner the same press attention, public sympathy, and law enforcement scrutiny. A rise in cargo losses ensued and forced companies like American Eagle to buy its own insurance, devise its own cargo security measures, hire its own security escorts, and accept a greater financial burden for cargo losses. "It's a different business model," explained McBride. It's also another level of risk. In Mexico, cargo thieves are more brazen and violent than their counterparts in the US. It's less pick up and grab a few boxes at rest stops and more Wild West. McBride said it can be very violent, with criminal gangs chasing vehicles, shooting out tires, and kidnapping drivers and releasing them, naked, dozens of miles from the point of attack. Enhancing theft opportunity is often unforgiving terrain that renders GPS tracking nearly impossible for long stretches. "Over some rural mountain passes you might have zero cell coverage for fifty miles. So where do they set up the ambush? In those spots," McBride explained. Although technology has limitations, it's a critical component of a cargo security strategy, along with route planning, said McBride. His LP team conducts ongoing reviews of technology improvements, such as satellite-based 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. 18 MARCH–APRIL 2019 | LOSSPREVENTIONMEDIA.COM

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