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Beyond Shrink—From LP Practitioner to Integrated Business Professional
Category : retail
2011-12-01

Kev Auty President of KEA Associates

To be successful, today's loss prevention professionals need to equip themselves with skills beyond their craft, including politics, diplomacy, operations, finance, general business knowledge…and one additional skill—how to sell. After all, businesses are in business to make money—no margin, no mission.

Today's economic reality suggests that if we don't talk bottom-line language, we will be left in the broom closet of idealists, hoping to be recognized for wanting to do the right thing and not as a cost center. Experience tells me that we need to explore this reality and take the opportunity to add some additional tools and a different perspective to the portfolio of today's beleaguered LP professional.

How many times have you asked your boss for money to buy equipment, software, or other technology that you know will improve your process, only to be told that you are a cost center? Are you denied the funds in the name of recessionary measures, cost cutting, competitive advantage, or another equally important business reason? "But it will help us catch the bad guys and reduce shrink," we say as passionately as we can.

The top challenge facing LP professionals today is convincing their employers to invest in innovation. The only way is to show the link between loss prevention, intra-departmental performance improvement, and the overall impact to the bottom line.

We have all been told that loss prevention is a "necessary evil." It's time to show our organizations that we add value and positively impact the bottom line in economic terms beyond theft and fraud. By learning to sell the benefits of our tools and skillset to operations, finance, marketing, merchandising, and other departments, we will be successful in securing funding for projects that will impact general business performance and ultimately the bottom line.

To pique the interest of the purse-string holders, it is necessary to present costs and a good return-on-investment plan. Be sure to provide information your boss doesn't currently have. For example, "Do you know we can track and manage inventory in real time from the back door to the sales floor to the basket and out the front door?" Or, "Do you know we can provide reporting on conversion rate, customer service, customer habits, shopping patterns, dwell time…?"

The key is to align your position with your corporate position.
• State their problem (inventory management, conversion rates, etc.).
• State the solution (your brilliant idea for retail reporting).
• Tell them how you will achieve performance improvement, cost avoidance, expense reduction, and revenue enhancement.
• Deliver pay back and ROI assumption.

LP professionals are in this business to make a difference. We all possess a great deal of value that we want to transfer to our workplaces. I believe we have the responsibility to take our "show" to our business leaders and demonstrate that we are not a cost center. Our business is changing rapidly. Let's show that we add to the bottom line…beyond shrink.

Jen Drake, Director, Resource Protection, West49 Inc., a division of Billabong International Ltd. "i3 International was my partner in introducing the Dvr analytics to our store operations, merchandising, planning, marketing, and advertising folks. right out of the gate, we focused on a KPI that could help drive sales performance to a new level. traffic conversion data tells store operations the total number of customers who visit the store and don't buy. this business intelligence gives us a chance to experiment and build strategies to increase the number of visitors we convert into buying customers."

Rui Rodrigues, National Director, Loss Prevention, Staples Canada "LP executives are challenged more than ever to present convincing arguments to their organizations to spend capital on loss prevention tools. after all, a camera system, for example, is a cost that just depreciates over time and has no true roI. Well, it doesn't have to be that way. i3 International understands the challenges LP leaders face and offers a great product for our needs, with the flexibility to deliver other business intelligence metrics, such as traffic counts and conversion rates, which is added value to sales and operations executives. the team at i3 listens to their customers, takes the time to understand overall business goals, and connects the business need to what they offer, so they can deliver a solution that an LP leader can present to their organization, which speaks to roI for the entire business."

Paul Paglia, Senior Director, Loss Prevention and Retail Operations, Donna Karan "We are methodically looking to layer video analytics into many aspects of our business. I believe this technology will allow us to run a more efficient operation and ultimately a more profitable company."

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