Make no mistake about it…Customer & Employee Theft are set to EXPLODE in 2009!
This is not a crystal ball prediction or a shock and awe headline…and you don’t have to be a rocket scientist to see the writing on the wall.  The experts tell us that unemployment will likely hit 9% this year…home foreclosures are already higher than at virtually any time in American history…taxes will be on the rise…and, as more and more businesses lose sales, most will be forced to raise prices.   So, the bottom line here is that all of this is putting the squeeze on all of us and, unfortunately, on all of our shrink-causing foes.  It just is what it is….and with these factors in play, we project that theft by vendors, customers and our own employees in 2009 will easily rise by as much as 17%…perhaps even more.  

If we’re right, this 17% rise in theft will cause a 9+% increase in total store shrink [in real] dollars. That’s a more than 9% higher dollar loss…ON TOP OF what’s already a severe shrink loss number. That’s bad !  

But, while I fully believe that theft is on the rise and will continue to be on the rise throughout 2009, don’t despair…because there are steps that you can take to get your arms around your shrink losses and protect your stores and your hard-fought profits.

Now, let’s establish a positioning statement or thought…“Loss Prevention is not an event; it’s a way of doing business.”
 

This will be difficult for many operators. Changing habits can be tough. Worse yet, changing habits in Loss Prevention is very tough because most companies take an exception-based attitude about Loss Prevention. More progressive thinkers are; (1) exceedingly pro-active, (2) constantly seeking new control methods, (3) collaborating relentlessly, and (4) elevating Loss Prevention to its rightful place in the corporate hierarchy.

1: Talk. Talk with your Store Managers, Department Managers and every employee. Teach them to Think Shrink and tell them why they should care. Teach them to See Shrink and show them where to look for it. Teach them the business of retailing and explain how shrink puts all of their jobs at extreme risk. But most importantly…teach them how to proactively help you prevent shrink by alerting you to the causes of your shrink, wherever they see them.

2: Get everyone engaged…without exception. For over 30 years, I have been teaching that Excessive store shrink is the manifestation of a poor corporate plan. If you and your employees fail to have a collective idea of where you want to go, chances are good that you won’t get anywhere. Everyone must be involved and committed in order for you to reach a viable solution.

3: Set goals and visual expectations. Goals are not merely quantitative…they’re qualitative, too. Start by painting your Managers a picture…of what a store under control looks like. Show them what they should do — when they should do it — how they should do it — and how they should react to shrink-causing issues when they see them.

Remember…It’s not that you have a shrink problem that matters…it’s whether you know that you have a shrink problem and what you do about it that matters.

4: Create a constant feedback system. Effective store-wide (or chain-wide) shrink control programs include provisions

for sharing daily discoveries and ideas with others within the store or chain. Some companies handle this through brief in-store meetings, bulletin board postings, group e-mails or even internal “blogs”. But no matter which method works best for you, the important point here is that the prompt and frequent sharing of information and ideas with others is critical to your success.

5: Establish rules for Execution accountability. Telling employees what to do to stop theft-based shrink-causing activities when they detect them is just the beginning. Ensuring that they actually follow-through and execute those directives….then holding them accountable for doing so are the often “missing links” that will create the lasting behavioral changes that will make The Big, Long-Term Difference in your shrink-stopping efforts.

6: Reward positive behavioral changes. You cannot continue your past behaviors and expect to achieve better results.

And, you cannot allow your managers and loss prevention/audit specialists to continue their past practices and expect them to achieve better results. Smarter approaches, smarter communications and a more clear vision of the future are all demanded.

7: And remember this vital point: