LP Magazine

JUL-AUG 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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who show they can be a quick study and then pair them with AP investigators. And that concoction has proved to be a good recipe." Because of the value data analysts bring, keeping and retaining talent is also a growing challenge facing LP departments. To provide even more data support to investigators, Home Depot has recently added new staff positions in its three AP investigative divisions. "It allows us to take advantage of analytics capabilities that field investigators—running and gunning out in the field—don't have time to dig into," said Rory Stallard, senior manager of AP investigations in its western division. The new hires reflect the company's continued investment in analytics and its drive to be more efficient. "We should be able to work smarter, get results with less effort, connect dots that we may have missed, and accelerate our closure rate," said Stallard. Data analytics are ingrained into the AP group at Safeway, a banner within the Albertsons Companies. Most divisions employ a full-time data analyst in the AP department, working forty hours a week, as well as analysts on the corporate team—and they play an outsized role in generating cases. "It produces a large yield for us," said Bandaries. "We rely on data analysts and analytical tools to conduct investigations; the role of analytics in our AP world is huge." He described a typical case flow in today's retail environment. Data analysts are constantly monitoring common presets for excessive voids, for example, as well as creating their own data sets to monitor for normal and abnormal activity. When analysis identifies out-of-range activity, the analytics team digs in, teasing the story out of the data, the plot from the numbers. "That's when the true analysis and research happens," said Home Depot's Cunningham, noting that data analysts play a critical role in identifying whether discrepancies are malicious in nature, present a training opportunity, or if "looking below the surface may unwind a different huge opportunity." The initiation of an ORC case is typically different than in years' past, noted LP executives. Some cases are still born from incidents in stores, but it has become more common for investigations to be pushed forward by trends observed in data. Analytics similarly indicate which cases are valuable enough to make it worth investigators' time to go after. But that is not to say the value of in-store intelligence has been lost, noted Cunningham. "We haven't turned our back on what associates see and tell us; in fact, we're doing a better job than ever crowdsourcing and getting tips, and then using that to inform our data analysis," he said. Often, data analysts will access store video or other sources of data to help prove up the case, or perhaps to identify if the anomaly is instead the result of a training issue or a systems snafu, such as a glitch in the point of sale. Whatever the cause, analytics provides the AP team the ability to rapidly identify and remediate causes of loss and inefficiency. "Identifying training issues can be a huge area for us, such as a process that has not been communicated correctly to associates, which they can see through the data," said Safeway's Nathan Bandaries. In those cases, the ability to act quickly and correct the training gap prevents loss that typically exceeds even cases of widespread fraud. Although computation extracts the narrative, there is still strong reliance on people looking in the right places. The ability of 1s and 0s to do their job hinges on experience, intuition, creativity, coordination, and relationships, suggested LP leaders. For example, to improve identification of fraud schemes, inefficiencies, or problems that need solving, there must be continuous refinement of data presets and monitors, which is typically reliant on human skill and coordination. "It's based primarily off the knowledge of the analyst and their partnerships with their fellow It's not only human skill that shapes the value of investigative analytics, it's also human limitations. A burgeoning area of analytics is built around trying to put information extracted from data analysis into formats that the human mind can more easily make sense of. ANALYTICS IS NOT JUST A NUMBER'S GAME Nathan Bandaries Rory Stallard 18 JULY–AUGUST 2019 | LOSSPREVENTIONMEDIA.COM

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