Reducing retail wastage and instilling zero-tolerance attitudes to theft and fraud could save millions, says Anne Davies
Last year, there was over £4bn worth of shrinkage loss caused by theft, wastage and poor process compliance on the high street. It's a staggering figure, yet only 23% of the top 100 retailers surveyed at April's Retail Fraud Conference felt that the only way to reduce it was to introduce an effective culture-change programme. That means 77% are missing a trick.
Shrinkage is, to pardon the pun, not a problem that's shrinking and one of the issues is the huge level of complacency surrounding it particularly when it comes to internal theft, which can account for up to 40% of loss. Some staff think it's a perk and that their employer won't miss the odd item. Others invoke a breach of the 'psychological contract' arguing they were entitled to take items or cash because they were overlooked for promotion.
This can't go on. But if employers are to introduce a zero-tolerance culture to the workplace, that will require effective communication and education. Staff need to be taught what shrinkage actually is. They need to understand how corrosive it is and what impact it has on stakeholders through higher prices for customers, and salary and bonus constraints for staff.
This does not have to be a big stick approach and one way to really get staff on board is to engage them in tackling external theft. A culture of zero-tolerance can be instilled by training staff to be vigilant and the use of the maxim 'good customer service is good loss prevention'. In Taunton, for instance, stores have worked with police on what they describe as 'excessive customer service' to keep local 'characters' out.
Introducing a zero-tolerance culture can also help combat the other big cause of shrinkage wastage. Iceland, for example, uses a multi-discipline culture to measure and manage shrinkage and has one of the lowest shrink figures on the high street. Its loss prevention team regularly meets with operations, merchandising and buying to understand the numbers and their impact upon the bottom line. Here the culture of plenty is replaced with a culture of common sense.
Isn't it time the same zero-tolerance approach was adopted by others too?
Anna Davies is director of professional services at ORIS.
Last year, there was over £4bn worth of shrinkage loss caused by theft, wastage and poor process compliance on the high street. It's a staggering figure, yet only 23% of the top 100 retailers surveyed at April's Retail Fraud Conference felt that the only way to reduce it was to introduce an effective culture-change programme. That means 77% are missing a trick.
Shrinkage is, to pardon the pun, not a problem that's shrinking and one of the issues is the huge level of complacency surrounding it particularly when it comes to internal theft, which can account for up to 40% of loss. Some staff think it's a perk and that their employer won't miss the odd item. Others invoke a breach of the 'psychological contract' arguing they were entitled to take items or cash because they were overlooked for promotion.
This can't go on. But if employers are to introduce a zero-tolerance culture to the workplace, that will require effective communication and education. Staff need to be taught what shrinkage actually is. They need to understand how corrosive it is and what impact it has on stakeholders through higher prices for customers, and salary and bonus constraints for staff.
This does not have to be a big stick approach and one way to really get staff on board is to engage them in tackling external theft. A culture of zero-tolerance can be instilled by training staff to be vigilant and the use of the maxim 'good customer service is good loss prevention'. In Taunton, for instance, stores have worked with police on what they describe as 'excessive customer service' to keep local 'characters' out.
Introducing a zero-tolerance culture can also help combat the other big cause of shrinkage wastage. Iceland, for example, uses a multi-discipline culture to measure and manage shrinkage and has one of the lowest shrink figures on the high street. Its loss prevention team regularly meets with operations, merchandising and buying to understand the numbers and their impact upon the bottom line. Here the culture of plenty is replaced with a culture of common sense.
Isn't it time the same zero-tolerance approach was adopted by others too?
Anna Davies is director of professional services at ORIS.
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