Shaking Shrink

Last week, major food retailers Pick n Pay and Shoprite reported a distinct shift in the ‘contents’ of shoplifting perpetrated in their Western Cape stores. Luxury goods, like clothing and electronics appear to be losing their popularity in relation to basic necessities – food and everyday household items. The shoplifters’ motivation is becoming less about greed and more about immediate urgency. And it comes as no surprise.

But the shift also presses retailers to re-visit measures against the die-hard problem of shrinkage. The Loss Prevention Conference, held in May, reported that retailers suffer an average loss of 5% of their overall income annually. And there’s finally consensus that simply placing a security guard at the store entrance is woefully inadequate to the task. What’s needed is an integrated, properly managed shrinkage reduction programme that makes optimal use of human collaboration and technological intervention.

On the floor, the introduction of system checkers along the reception channel has proved effective in reducing losses. The requirement of multiple signatures on the delivery documentation – those of receiving clerk, system checker and system checker principal – ensures much tighter control of inbound stock. A more specialised link in the system is the “Hot Product Controller”. Guardian of more sought-after and more valuable items, he tracks the movement of goods from the point of delivery to the shop floor.

Technologies like CCTV may not be new, but they can be better managed for a better intelligence output. The employment of specialist operators and their co-operation with trained detectives effects a shift from passive to active so that maximum gain is squeezed from the application.

Security is a grudge spend for all of us, but for the retailer it’s also a running cost with built-in savings. Indeed, retail security has achieved the unofficial and unfortunate status of business function.