All too often, loss prevention (aka. asset protection) initiatives are reactive—identifying incidents as/after they occur. This “whack a mole” approach is most often taken by under-supported departments who believe that apprehension results will help to substantiate their existence and funding.
Ideally, however, the primary goal should be to prevent losses in the first place. The execution of such a sustainable, proactive loss prevention program requires three key things to ensure success: consistency, visibility, and innovation. When well done, the results are felt across the company as it directly impacts the bottom line.
Like any other business function, the loss prevention department needs consistent strategies and programs that run throughout the fiscal year. These need to holistically approach shrink and support all locations and employees across the company.
- Audits – Audit all locations multiple times a year to ensure compliance to policies, procedures and processes. Certain locations might receive additional audits as necessitated by loss numbers; however, all stores benefit from check-ins through the year.
- Training and awareness – The loss prevention program needs to stay “top of mind” for employees with a steady cadence of relevant topical messaging.
- Dealing with theft – Any hint of inconsistency in redress diminishes the culture of accountability, signaling others that dishonesty is sometimes acceptable. Stick to clear policies that send a strong message to employees.
An effective loss prevention program is much more than policies, procedures, and posters! Visibility and interaction between loss prevention personnel and store-based employees reinforces the importance of the function and the understanding that there are vigilant systems in place to identify loss.
- Store visits (in-person or remote video/reporting) – Audits, loss prevention visits or mystery shops reinforce the understanding that someone is always looking out for the store. Visits can be positive check-ins with training focused on the effects of loss (e.g., customer service, sales, loss programs, etc…).
- Data analysis – Combined data from various systems (point of sale, inventory, etc…) can provide visibility into operations without requiring hours of in-store review. Exception-based reporting can provide insight into potential theft, margin erosion, training needs, and systemic issues.
A proactive loss prevention program cannot stagnate. It must be fluid, supporting the ever-evolving needs of the business—even when budget and resourcing are limited! To avoid becoming reactive, the loss prevention team must always be searching for ways to innovate. Innovation occurs when things are most difficult, and people are forced to think of new ways to tackle problems.
- Shared resources – Talk to other departments to identify resource-sharing opportunities.
- Industry peers – Talk with industry peers to learn what tactics they have used to do more with less.
- Expert partnerships – Find vendor partners with the expertise to provide resources and support to strengthen/supplement programs.
A loss prevention program focused on improving profitability is doable! It takes planning, proper development and sometimes a new approach to execution.