LP Magazine

SEP-OCT 2017

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/874445

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Page 61 of 79

SOLUTIONS SHOWCASE APPRISS RETAIL Seasonal Impact SRAs and shrink trend together, and they peak during the holiday season. Research from 2016 stated that 37 percent of shrink in the US and 38 percent of shrink in the UK occurred during the fourth quarter. The SRA distribution for both countries exceeded 40 percent at that time—roughly double that of other quarters. Margins dropped by about 9 percent during this period. One SRA in particular, returns, peaks during the fourth quarter holiday season. According to the National Retail Federation, returns as a percent of sales were 2 percent higher than the annual rate in 2015. This tendency has been recorded for years in NRF's annual reports. Controlling Shrink SRAs not only indicate where shrink may have taken place but also can be used as an early indicator of future shrink. By analyzing the transactions from Appriss Retail's install base of tens of thousands of retail stores in a variety of retail verticals, the company calculated the correlation between current SRA volume and future shrink. The SRA to Shrink Trend table shows the relationship across the industry. (Results vary by individual retailer.) The more transactions containing SRAs, the higher the shrink percentage. Therefore, reducing SRAs will help reduce shrink. The table clearly shows the correlation of SRAs and shrink. By monitoring SRAs throughout the year, retailers can detect problem stores and resolve root causes before it is too late. Erosion of Net Sales The errors or other situations that instigate legitimate POS SRAs diminish the customer experience for everyone waiting to check out—whether it is a pricing error that leads to a line void, the need to adjust tax for a professional contractor, suspending a sale while the consumer returns to the car for a wallet, or any number of other issues slow transaction times. The flow chart above right shows some of the common impacts. Monitoring SRAs for Improved Financial Performance Both "good" and "bad" SRAs impact shrink. They should be monitored on a corporate level to identify emerging problems quickly, before annual shrink is calculated. In addition, people with store and regional responsibilities can use them to spot unusual activities at store level. An LP professional, for example, will make better use of the time spent on a store audit by running an SRA report in advance. Analyzing the SRAs with Appriss Retail's Secure Analytics is a quick and effective way to learn where to focus efforts to reduce shrink and ultimately improve profits. Visit apprissretail.com for more information. > 3% 2.501 to 3% 2.01 to 2.5% 1.501 to 2% Transactions Containing SRAs Shrink 1.01 to 1.5% < 1% SRA to Shrink Trend fewer more 62 SEPTEMBER-OCTOBER 2017 | LOSSPREVENTIONMEDIA.COM

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