From Security to Loss Prevention to Retail Asset Protection to Profit Enhancement

Retail loss prevention is a very different world today.

retail asset protection

The retail loss prevention industry has seen a pronounced evolution through the years. It is very different today than in the past, and it will continue to evolve. I have been in this business for over 40 years, so I have experienced this evolution firsthand. But until writing a recent series of articles for the magazine, I never thought specifically about the various stages the industry has gone though and the characteristics of each.

When I started out, we were security, and life was pretty simple. There was a distinct “cops-and-robbers” attitude and, in fact, a lot of the security staff was made up of off-duty or ex-cops. It was us versus the bad guys, both internal and external. We caught shoplifters, and some of the more sophisticated departments began to look at employee theft more closely.

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But there weren’t many tools in those days. Many retailers still used night watchmen, not remotely monitored alarm systems. Cash registers were manual, and the only investigation tool you had were printed register tapes. Charge sales checks were manually written with “tissue copies” kept in boxes in the audit room in case you needed them. Sales checkbooks were numbered and signed out to individual salespeople so you knew who had book #10026 and so on. And there were no cameras over the registers.

One interesting advantage in those days is that most major department stores had their own credit department. If a customer presented a suspect credit card, you could actually get the real customer’s phone number from credit and call them. Many stolen credit card cases were solved that way. Yes, we knew about cargo theft and did have truck seals, but the manual controls were rudimentary. We were also aware of “UPS shipouts” by dishonest employees, but catching a thief using that method required the laborious task of physically auditing outgoing shipments to verify payment. It took time, but the good news was, when you caught someone using this method, it was usually a big case.

As time went on, retail security evolved into a softer concept called retail loss prevention (LP). It encompassed broader thinking about retail loss and how to prevent it. Areas such as safety compliance and audits started to fall under the LP banner in some companies. Even insurance management was included in some cases. Physical protection of product to prevent theft began to catch on. But that often included the use of clumsy cables for furs and leather coats and locking up all the valuable merchandise in sight. Stores began using cameras more, but that usually involved banks of monitors being watched real-time by loss prevention agents. Early electronic article surveillance began to arrive, but adoption was slow in the beginning, often opposed by store management and visual. Investigation of employee theft was rudimentary and lacked today’s modern tools. Internal interviewing was far from the Wicklander-Zulawski sophistication we see today.

Loss prevention began to morph once more into calling itself retail asset protection (AP). Thinking now was even broader. Asset protection professionals had warmed up to the necessity of partnering with management to reduce losses. In addition, the practice of teaching asset protection personnel how various non-AP processes in the store really worked was catching on. The theory was that one had to understand retail store processes overall in order to detect and deter leaks.

Operational and paperwork errors would have been too boring for old time security agents but became an ever-increasing focus of the retail asset protection teams. Cameras began to record activity to allow for later review, and in-store camera placement expanded. Professional shoplifting became known as organized retail crime; whole departments formed to combat it. Electronic point of sale (POS) and its data provided the platform for exception reporting growth. Cameras began to be tied to POS data, and remote monitoring became reality. The growth of civil recovery even turned some asset protection departments into profit centers. Store audits began to be assisted by electronic devices, and sophisticated software began to be developed both in-house and by the vendor community to track refund fraudsters. Retail asset protection departments began to be viewed as trusted partners by management. Generally, shrink throughout the United States saw marked improvement.

So, here we are. Technology provides more tools than ever before, and we have better training, better communication, better partnerships and improved results. So, where do we go from here?

Recently, I was performing research for an article I plan to write for the March-April 2017 issue of LP Magazine. During the process, I talked to numerous experts in the field of retail asset protection – both from the retail and solution provider sides of the fence. Virtually 100 percent of them agreed that the future of retail asset protection lies in the need for a distinct transformation from reducing loss to driving sales and enhancing profit. Successful asset protection departments and executives will have to make that switch a top priority.

There are some AP tools already in place that potentially can be modified or repurposed to aid in that effort of profit enhancement. Item-level accuracy has been called one of the most important aspects of successful omni-channel retailing. Why not modify existing EAS tags and pedestals, perhaps with radio frequency identification (RFID) capability, in order to accurately capture complete information on every item that went through a pedestal or was scanned on the sales floor? What do we have, what left the store, was it paid for, is the on-floor inventory accurate? Physical inventories become easy and more frequent by simply scanning product. Cameras can “see.” What if their purpose was expanded to record not only customers entering and exiting but also their movements and habits once inside the store, driving improved product placement? Analytics around that in-store movement is already happening and will gain even wider acceptance with smart cameras and analytic technology. These are just a couple of examples of how retail asset protection can begin to contribute to their company’s overall success.

So, yes, the retail security industry has grown up. Discovering new ways to aid in sales and profit enhancement is the key to AP’s future. All retail asset protection professionals need to adopt that mindset immediately if they haven’t already.

Comments
  • Nice article Bill. Our profession, for the most part, has thankfully evolved from the “cops and robbers” mentality into what you describe as profit protection professionals. That is not to say that security is not a piece of profit protection. Dealing with security matters that can create harm to employees and customers, and subsequently brand image, is an expertise and a very important one that operators usually don’t possess. However, for our profession to continue to evolve and get the much desired seat at the table, it is incumbent that we expand our operational knowledge of our respective company to see where we can add value.

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