Through the Eyes of the Guest – Asset Protection at Gordmans

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Successful asset protection and store security programs are never “tone deaf.” This means that the most effective programs are shaped, managed, and refined over time to reflect a retail company’s culture, style, and “concept.” High-tech electronics retailers with smiling greeters and bag checkers out front reflect a certain tone and attitude; as do big-box retailers with dark-shirted security guards surveying check-out lanes and exits; as do very high-end shops in which crisply shirt-and-tied officers function as concierges and plainclothes detectives, dressed to the proverbial nines to look like other affluent shoppers.

Based in Omaha, Nebraska, Gordmans is a great example of a seamless retail environment in which asset protection is as unobtrusive and yet as effective as smiling counter service and check-out associates. “Our asset protection philosophy at Gordmans is engrained in our company’s culture. Unlike some other smaller retailers, we do not have a knee-jerk style. We are focused and steady,” says Rich Palmer, director of asset protection. “There is a family management style throughout the company that is reflected across our stores and, certainly, in our asset protection program.”

Gordmans mission statement is short and to the point:

We will delight our guests with big savings, big selection, and fun, friendly associates.

“Expect the Unexpected” Shop and Be Entertained

In some ways, particularly for those who have spent any time at all over the years living in regions where the grass and mountains were tall and most buildings were not, Gordmans projects an image…and a shopping experience…distinct from both the suburban big-box giants and super-malls.

Gordmans is one of the largest remaining regional family-owned retail companies, with annual sales estimated at well over $400 million. It operates 63 stores, each an average of 60,000 square feet, in fifteen states throughout the Midwest, as far west as Colorado and as far south as Mississippi; plus two distribution centers in Omaha.

The firm’s Omaha roots go back to 1915 and Sam Richman’s small retail clothing shop─“Richmans: Outfitters to the Family.” He was joined in 1936 by Dan Gordman who was driving west, away from his old job at Bloomingdale’s in New York. Interrupted by car problems, Gordman ended up staying in Omaha, marrying Sam’s daughter, Esther, and joining the business as a full partner

The store, Richman Gordman, prospered and expanded as Dan Gordman applied merchandising lessons learned at Bloomingdale’s. Over several decades of what Palmer calls often “explosive” growth…without a single acquisition…the company added stores in Omaha and Lincoln, and eventually, throughout Nebraska as well as in Iowa and Kansas. Richman Gordman was the first Midwest retailer to feature centralized checkouts, shopping carts, and self-service shoe departments. It was also among the first to open its stores on Sunday.11_copy_copy_copy

In 1975, the company launched a second brand, Half Price Stores. As the company successfully navigated through a major financial crisis in the early 1990s, Jeff Gordman, Dan’s grandson, became CEO in 1996 when the chain became simply Gordmans.

The distinctive store style and tone originated by Dan Gordman continues today. Unlike some of the larger and better known national chains, Gordmans stores have an easy-to-shop layout, a racetrack concept that allows customers to quickly locate departments by following a path around the perimeter of the store, with wide aisles, open areas, bright lighting, and energetic signage and graphics. All of these features are appealing to shoppers and help mitigate theft, in contrast to the more prevalent narrow, long aisles and high displays.

Giggles, a children’s play area with a children’s theater, are installed in many of the new Gordmans stores along with sports-themed TV viewing areas in the men’s department. Of course, the company claims the biggest attraction is the brand name fashions offered “everyday at incredible savings.”

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The company also frequently quotes Dan Gordman’s formula of “looking at the store through the eyes of the guest.” Today, Gordmans’ advertising slogan, “Something Unexpected,” emphasizes both its vividly colorful clothing lines and its lively store environment. So on a smaller scale than a big-box store or super-mall, a Gordmans location in its mid- to small-city environment is a modest, but compelling, shopping destination that provides a safe play environment for kids, makes it easy for parents to keep an eye on the play area, and still allows them to shop for a longer period of time than they might otherwise.

When Palmer points out that “we are steady” at Gordmans, he is not suggesting there is anything casual or laid back about the company’s asset protection operation. Still, there seems to be a best-of-both-worlds approach. “I have freedom to concentrate on the people basics, and I can also bring in all the new technology I need,” says Palmer. In a low-key sense, that sums up Gordmans’ asset protection strategy.

Gordmans’ Asset Protection Strategy

For Palmer, the basics very much center on positioning his asset protection team as being one of the building blocks of a successful store. “Our company is only as good as its foundation. Asset protection is one of the building blocks of the operation,” he explains. “We have asset protection agents dressed in plain clothes in all of our stores and senior agents at the district level. They are all hourly employees. They are completely integrated into store operations; involved in all aspects of training employees, auditing, and daily operations. We work hard to maintain a strong sense of partnership between a store’s management and the asset protection team.”

Like most progressive asset protection leaders today, Palmer believes asset protection and loss prevention are critical, mainstream business functions, rather than quasi-law enforcement or crime prevention functions. Palmer is firm in his opinion that one of the problems with conventional LP is that it is “one dimensional.” He says that he and his team “are involved in far more than just catching the bad guys. We are all in the retail business together, working with other store functions to make each store successful and helping to give each guest a great experience.”

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Not surprisingly, loss prevention training for employee associates as well as managers is completely integrated into new-employee orientation, formal training, and subsequent awareness programs. Palmer seems to belong to the school of asset protection thought that a retailer today simply cannot afford to segregate asset protection or loss prevention from store operations, merchandising, or human resource recruiting and training.

In addition to asset protection agents and senior agents working in the stores, there are seven asset protection district managers and two specialists who tackle a range of activities, from advanced training in English and Spanish to monthly awareness programs and newsletters to technology. There is also a manager of investigations and a fraud analyst. Palmer’s managers are certified interviewers, qualified to conduct both face-to-face and telephone interviews, most with law enforcement experience.

Palmer himself reports to an executive vice president who is responsible for operations, training, and distribution.

Palmer points with obvious pride to the stability of his asset protection “family.” “We are very selective in our recruiting and invest a lot in training and developing our asset protection team,” he says. “There is also a strong people culture at Gordmans in that managers at all levels and in all operations areas make it a point to treat associates fairly, and always to try to do the right thing by people.”

Palmer says that both internal shrinkage and general employee turnover at Gordmans is dramatically lower than national retail industry averages. The two trends, as much credible loss prevention research has shown, are clearly related. Increased employee retention correlates positively with reduced internal shrinkage as well as stronger customer service ratings.

“We are not exactly a small company,” Palmer says, “but we’re not a traditional big-box company either.” Most Gordmans stores are in smaller suburban areas in which there tends to be less transient populations. Palmer says that after a point in time, people realize that they have come to know each other fairly Through new store design, continual redesign of older stores, and continuous asset protection improvement, Gordmans has steadily invested in asset protection-friendly space allocation, traffic flow, lighting, and, of course, digital video surveillance.well. “There is the ability here at Gordmans to build long-term relationships, which is not always so easy to do at bigger companies.”

As with the company’s workforce as a whole, Palmer says that staff turnover on his asset protection team is especially low, with just one person leaving in the past seven years. The focused and steady approach and the company’s commitment to provide continuous training and internal advancement opportunities seem to get desired results.

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Technology Basics

While Palmer is reluctant to talk specifics about Gordmans’ asset protection budget for staff or technology, he is clearly pleased about the company’s willingness to invest in and support technology. “Over the past decade, we have developed a very effective, very integrated technology defense. We’ve been fortunate in selecting the right vendors and have developed some very strong relationships. We only work with vendors who truly understand our needs and help us achieve our goals.”

At the heart of Gordmans asset protection technology arsenal are robust networked digital CCTV and electronic fire and burglary protection systems covering over 90 percent of the chain’s stores. Palmer says, “Our remote viewing capability is extremely efficient, which helps our store asset protection associates handle situations and would-be situations quickly and effectively. This produces a definite positive return on investment.” Palmer says Gordmans is now looking at taking the next step with technology and is reviewing IP video surveillance products.

Palmer says Gordmans’ point-of-sale (POS) exception-reporting system is also fully integrated into the network. This integration of camera coverage with real-time POS exception reporting helps Gordmans quickly deal with both potential guest and employee theft and fraud. “Passing merchandise through the register system as well as issues with credit and gift cards are problems for all retailers today,” he explains. “Our asset protection managers and store managers work very closely together to create as seamless a system as possible for controlling check-out incidents.”

In addition to CCTV and POS technology, a third LP technology component in use is electronic tagging. Gordmans currently tags close to 100 percent of its core merchandise. “We are in our third generation of EAS technology, which we first introduced into our stores in the mid 1990s. We now use source tagging, radio frequency identification, and integrated labeling. We’ve developed an excellent relationship with our system vendor in terms of introducing follow-on systems, testing new systems, and supporting our constant expansion.”

Gordmans’ tagging system and vendor support are designed to provide the flexibility to alter its tagging strategy on a monthly basis. Palmer’s team looks hard at the data from each store and from each region. “We also work with our merchandising and store management associates not only to spot trends, but even anticipate trends when it comes to the newest, or ‘hottest,’ merchandise that is about to be introduced into the stores. The team is determined to be always ready and react very efficiently.”

Bringing People and Technology Together

Visiting the Gordmans website (www.gordmans.com) can give someone a real-life sense of the Gordmans basic store design. The store design and Palmer’s philosophy on technology provide an effective real-time, comprehensive, but unobtrusive, asset protection environment.

In the store representative schematic featured at the website (see page 56), there are eighteen camera positions throughout the store floor placed on the perimeters of the broad traffic lanes at the intersection of merchandise departments, At each position, a viewer can navigate through a 360-degree scan of all surrounding displays and counters and associate and guest activities. Cameras also cover the children’s entertainment areas, rest rooms, and other common areas. The camera at the front of the store, near Guest Services, provides a full view of the main store entrance with double-glass doors.

Through new store design, continual redesign of older stores, and continuous asset protection improvement, Gordmans has steadily invested in asset protection-friendly space allocation, traffic flow, lighting, and, of course, digital video surveillance.

Palmer’s comment that “we are steady at Gordmans” can refer as equally to the company’s steady growth over the past decade or so and to the purposeful evolution of an effective asset protection program that is aligned both culturally and in practical business terms with company and operations management.

Small Family, No Barriers

Rich Palmer himself is an example of Gordmans distinct culture and attitude. He came to know Gordmans in the late 1980s when he worked part-time as an asset protection agent in a Gordmans store in Lincoln while he studied for a degree in business administration at the University of Nebraska. After a few years in law enforcement, he joined the company full-time in 1995 and was promoted to director of asset protection in 2001. Today, Palmer is a certified protection professional (CPP) and has held executive committee positions with ASIS International and Crimestoppers.

“I returned to Gordmans because I believed in the culture and had the opportunity to be mentored by my former boss here,” recalls Palmer. “I’ve never regretted coming back. In loss prevention, there can be a perception that only those at the really large retailers can become a big success and have rewarding careers. That is simply not the case. Younger people need to see the longer-term potential that an organization like Gordmans offers.”

Palmer says that there is a “no barriers” attitude at Gordmans. “My own story is about having people believe in me, which opened up opportunities to move ahead.” In addition to leading the company’s LP operations, Palmer spends a lot of time as a member of the senior management team working on store renovation and merchandising display strategies; new store site selection, design, and construction; and workplace safety compliance and training.

Focus on the Guest

In today’s fast-paced, big-box, and mega-mall retail world, the terms “big savings,” “brand names,” “fun,” and “easy-to-shop” do not always reflect consumers’ experience. Gordmans is growing strongly and steadily…still without acquisitions to date…despite fierce competition from much larger retailers with low prices.

And as Palmer says, “Our people like to think that asset protection in its own way helps enhance and add value to our guests’ experience in our stores. Now that’s rewarding!”

Michael Stugrin is a business writer and consultant in Long Beach, California.

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