LP Magazine

MAY-JUN 2018

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/978254

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SECURITY AT THE SOURCE 42 MAY–JUNE 2018 | LOSSPREVENTIONMEDIA.COM honest discussions about what are the best solutions." Ties That Bind Data provide a helpful building block to successful joint projects, according to Hayes. "Shoplifting can be very tightly clustered to specific products, specific brands, and even specific SKUs for specific brands," he said. Most retailers have pretty good information on the rate of loss, down to the category brand, and sharing that data with manufacturer partners can help enhance coordination on theft prevention, he continued. "It's still the case that some manufacturers are blind to it, and they don't know anything until the retailer reaches out and shows them numbers on theft." P&G's Monnin sees data as a prerequisite to forging problem-specific solutions and is in the early stages of working on new protection strategies for the company's Tide product. But to do it effectively, retailers need to partake. "We need our retailer partners to share data so that we can accurately assess the problem," she said. The quality of the data collected and shared could also be improved to forge more meaningful cooperation, suggested Nicole DeHoratius, a professor at University of Chicago's Booth School of Business and an expert in retail operations management. "Retailers shouldn't just share their shrink lists. They need to conduct additional analyses and examine the underlying characteristics driving the shrink problem," she advised. "LP needs to be far more analytical and examine what's common about shrink across products, locations, retailers, and so on. "For example, do we observe commonalities across vendors, distribution channels, stores, and products with the same packaging? What are the underlying attributes of the shrink that might give an indication of the root cause?" This is particularly true given the pace of churn among SKUs and vendors, she added. "So on the retailer side, the problem isn't generally a particular unwillingness to share but rather the existing skill set of the traditional LP professional," she said, noting that to successfully move the industry forward, LP needs to adopt a more robust analytical skill set. Data sharing is key, and so is robust evidence of the effectiveness of solutions, according to Hayes. Manufacturers may be willing to bear the cost of a theft prevention solution, but they want evidence it works, and year-over-year data doesn't necessarily provide it. "Hundreds of things can happen during the year that can alter the results," said Hayes. As such, controlled experiments play an important role in providing both sides with confidence in a solution's worthiness and to forecast results, he advised. Without testing a range of solutions— multitudes of hard tags, spider wraps, and the like—and without data on how they impact shrink and sales, "then we can't understand what works," said Monnin. "We test them and then share the solutions to build a more robust solutions matrix." Stakeholder Involvement A successful product protection partnership with a manufacturer can occasionally hinge on luck—right time, right ask. But as for elements that LP can influence, making sure merchant teams aren't blind to inventory shrink and gaining their support is critical. "The key to success is when our merchants rally behind an effort," said John Doggette, LPC, director of LP merchandise shrink solutions and analytics at Lowe's, in discussing a recent success story in which a large manufacturer stepped up to fund a new product protection solution. "For LP, if you don't have a robust relationship with buyers, if you're not training them and have a program for that, then you can't expect things to get done. You need the buyer to be an advocate for the proposed solution." At Lowe's, Doggette said his team has worked hard to impress upon merchants that LP's goal is to increase on-shelf availability, overall sales, and ultimately profit—and not act as a roadblock. "It starts with relationship building and having a dedicated person or a team of people whose sole purpose is to work with merchants," advised Doggette. "A large retailer may have hundreds of buyers, so you need a retail LP organization that has someone on staff, if not a team, that is directly responsible for interfacing with buyers and for providing them with the data and analytics they need." Lowe's has dedicated staff members whose role is to interface with buyers from an LP lens, and their responsibilities include attending high-shrink merchandise division merchant meetings. In this way, the LP organization has insight into emerging developments. The LP-merchant liaisons also participate when merchants conduct product line reviews, playing an advisory role as the subject-matter experts around shrinkage and returns for the product category. "We need our retailer partners to share data so that we can accurately assess the problem." – Krista Marantos Monnin, Proctor & Gamble Nicole DeHoratius John Doggette, LPC

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