What Is Loss Prevention Today?

What is loss prevention these days? Three long-time industry veterans share their perspectives.

what is loss prevention

EDITOR’S NOTE: This interview is with three long-time loss prevention industry veterans. One is a retailer, one is a solutions provider, and one started on the retail side before starting his own company offering loss prevention solutions. We’ve chosen to not identify the individuals in order to allow them to speak freely without worrying about how their respective companies would edit their comments. That’s not to say that anything published here is necessarily controversial or inflammatory. What is most important is not who they are, but what their perspectives are.

EDITOR: How did you first learn the business of retail and retail loss prevention?

RETAILER: When I first started out, all the learning was on the job. There was no formal education process. There was no certification, nothing like LPQ or LPC, so you learned from others by traveling the store and trial and error.

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EDITOR: When you started as an hourly employee, did you think that someday you’d be a senior executive?

RETAILER: No, but I fell in love with retail and with LP at the same time. The loss prevention industry gave me a launching pad to learn retail because working shoplifting details in the store, you visit all the departments, which forces you to learn the business. Because I happened to love retail, it caught my imagination. When I finished college, I went to work for a major retailer and started as an executive trainee.

EDITOR: As a solutions provider, when you started off, did you think it was important to learn the business of retail and loss prevention in order to sell your product?

SUPPLIER: I did. I started beating the streets early in my career with mom-and-pop retailers who experienced the same problems that department stores or big-box retailers had. They have dishonest employees and shoplifters just like everybody else. I had to learn their business, to understand what they did on a day-to-day basis in order to sell an effective solution.

Across the last 30 years, I was lucky to be spoon-fed the systems that loss preventions executives now have as a matter of course—electronic articles surveillance, CCTV, point-of-sale exception monitoring, and, now, RFID for inventory control. But in order to employ those solutions, you had to understand the business. You don’t treat a grocer, a specialty retailer, an electronics retailer, and an office-supply retailer the same. You had to understand their business first in order to apply the most effective solution.

Another dynamic is how young people think about jobs differently today and have different motivations than we may have had years ago. You can’t just say, “Well, they’re not like me, so they can’t be good.” That’s not true at all. You have to be open to that difference. Anybody who’s in a senior position better pay attention, because this is the wave of the future. You have to keep up.

EDITOR: As a business owner, how did you learn about the loss prevention industry?

ENTREPRENEUR: I started in the retail business, although I wasn’t planning on getting into retail loss prevention at the time. I actually applied for a part-time job to sell men’s suits to make some extra money. But because I came from an investigations background in government and the private sector, they pushed me toward the loss prevention area. At the time I knew nothing about retail loss prevention. I actually had a lot of misconceptions. I thought I was going to be a guy in a jacket guarding a door, so I said, “No, thank you.” But as I learned about the different positions, and in particular the investigations positions, I became intrigued with the opportunities that were there, so I decided to give it a try.

As far as how I learned the business, it was mostly peer-to-peer. The team I first worked with in retail was really helpful, showing me the guiding principles of loss prevention. Then as an investigator, I took it upon myself to learn the different roles in the store environment, understanding everything from the store manager to the department managers to the sales associates. What do they do? What are their responsibilities? I had to understand what they were supposed to be doing so that I could recognize when something was wrong.

EDITOR: What is loss prevention today? How is it different in terms of skill sets, objectives, technology, than when each of you started?

ENTREPRENEUR: Hands down, I would say technology is the biggest difference. The amount and the quality of data available has come light-years over the past two decades. In addition to the technology, the educational resources are much greater today. In the past, there was a lot we had to figure out on our own. Whereas today, there are webinars, college courses, certifications, and security programs that simply didn’t exist 10 years ago, let alone 20. I think if you’re going to take the position seriously, you’ll be looking not just at how the business works, but also at how the loss prevention industry works. Taking the initiative to seek out these types of educational opportunities is critical to success in this field.

RETAILER: I agree that technology has been a game changer, and related to that is the new way that people, especially younger people, communicate using smartphones and social media. Another dynamic is how young people think about jobs differently today and have different motivations than we may have had years ago. You can’t just say, “Well, they’re not like me, so they can’t be good.” That’s not true at all. You have to be open to that difference. Anybody who’s in a senior position better pay attention, because this is the wave of the future. You have to keep up.

EDITOR: What suggestions do you have for young people starting out today?

SUPPLIER: I hearken back to my father, who told me, “The people who know how to do something will always have a job. The people who know why will always be their boss.” So as a vendor, my advice to young salespeople who are getting into the business is to learn as much as possible about how the client retailer does business. We’ve all heard the objection, “Well, you don’t know what I do.” I gained my Loss Prevention Certification in an effort to combat that objection. I think more vendors should endeavor to get into the LP educational process so there’s more of an assimilation when you walk into his office.

ENTREPRENEUR: That’s key—spending the time to understand the business and the challenges. If you have those relationships where the retailer understands that you listen to them to understand their issues and want to learn more about their business, opportunities will present themselves. Maybe you use them as a sounding board and say, “Listen, this might not even be something that you might be interested in, but can I bounce it off of you and get your perspective on how you think this would work in the industry?”

RETAILER: For young people starting out in retail and the loss prevention industry, if you like the work, if you truly enjoy it, then keep going. If you don’t, don’t. But if you do enjoy it, I think you simply can’t learn enough. Ask questions. Find a mentor, which I think is critically important. It’s also critical to show enthusiasm and volunteer for new opportunities to get ahead. Tell your leadership that you want to go the extra mile. Tell them, “I want to work, and here’s what I want to do. I want to get ahead.” Somebody once told me that you never go anywhere unless somebody else knows where you want to go.

EDITOR: Talk about the value of mentoring in this business from both the retailer and vendor standpoint.

SUPPLIER: Loss prevention executives, earlier in my career, mentored me and tried to help me understand what they did for a living and how I could sell better. One of the things that I would advise, as a mentor of salespeople, is to always understand and embrace who’s coming up the food chain. The person you have a great relationship with is not always going to be there. They’re going to retire, get fired, or get replaced. When I talk to an LP executive, I always ask, “Who are your best people?” Then I try to build a relationship with their direct reports, their up-and-comers, because someday, I will probably be selling to one of them.

RETAILER: For people coming up through the business, if you are in the position to be the mentee, I think the onus is on you to seek out mentors, ask questions, and let people know that you are interested in learning. On the other side, there’s nothing greater than seeing an up-and-coming person—and you want to say “young person,” but it doesn’t have to be someone young—who really wants to learn. As a mentor, when you take that person under your wing and really develop them, then finally you watch them soar, that’s a great feeling.

EDITOR: How does someone starting out in the loss prevention industry find a mentor to help them?

ENTREPRENEUR: That’s a tough question. When I think back to how the mentoring relationships happened for me, I didn’t necessarily seek them out. They saw the interest that I had, they saw the initiative that I had, and we just sort of gravitated towards each other. I would almost put the challenge to the industry. Is there an initiative we could start, an LP big-brother-type program, that would help to link up the up-and-comers with people who want to be a mentor?

EDITOR: From the vendor standpoint, what’s the measuring stick for an individual to get ahead in his company? Is it just about being a top salesperson?

SUPPLIER: The measuring stick for sales is always going to be how successful you are at selling your solution to the customer, and there’s a whole host of variables that go into what makes a salesperson successful. It’s his personal relationship, his leadership abilities in leading his team and making them understand that the goals are aligned with the retailer, and it’s understanding his products and how they operate in the retail environment.

I’ve sold things to people that didn’t work, which came back to bite me in the butt. But I’ve also sold things that truly made the LP executive look like a hero in his company. If you can assign your name to a solution like that, where the LP exec looks better in his own company because he got a great return-on-investment and invested in something that made the company either more efficient or more profitable, you will get ahead as a salesperson. It’s the community property of credibility, where you’ll be more successful in your own company because, once you gain that credibility with the loss prevention executive, he trusts you with other solutions when you bring them to him.

One of the things that I would advise, as a mentor of salespeople, is to always understand and embrace who’s coming up the food chain. The person you have a great relationship with is not always going to be there. When I talk to an LP executive, I always ask, “Who are your best people?” Then I try to build a relationship with their direct reports, their up-and-comers, because someday, I will probably be selling to one of them.

ENTREPRENEUR: Looking at the people I’ve been involved with, the ones that are most successful are the ones who take the initiative. They don’t just try to make a sale to the business, they try to understand the problem, try to make sure that they adapt or configure how their solutions will fit in that environment, and then work directly with the LP executives to help them create the ROI model and sell it within the business. Then they work with the LP teams to implement those solutions and make sure that they’re being put in properly. It’s one thing to sell a system. It’s another thing to actually get it set up and working. When there’s that partnership, it will bring success both to the salesperson and to the people that are running those companies.

SUPPLIER: The best loss prevention executives that I had relationships with treated me as if I was one of their employees, as opposed to treating me like a vendor trying to sell them something. They held me to a standard of being creative and coming up with solutions for them, just like they would one of their regionals. They’d have internal meetings where you, as a vendor, were sitting there with six regionals, and you had the same goal, whether it was lowering shrink or protecting some merchandise that was going to be displayed in a different mode on the sales floor. Those executives who treated me as one of their own team were much more effective.

EDITOR: I still occasionally hear a retailer say something to the effect that “vendors just want to sell me a widget that doesn’t fit my business.” Or from the vendor side, “the retailer won’t open up to let me understand their needs.” What do you say about those attitudes?

SUPPLIER: There’s a real disconnect if a vendor has armed his salesperson with a product that doesn’t meet the needs of a modern retailer. On the other hand, if a salesperson is trying to gain an audience with a retail executive without doing the research to learn whether the product or service they want to present will fit the retailer’s needs, they are probably in the wrong job.

RETAILER: By the same token, as we’ve already said, if a retailer is not open to letting a solutions provider into his operation to understand his challenges and needs, how can they expect someone to walk in and offer an appropriate solution? My guess is someone who is making comments like that has either been burned by buying the wrong solution or they don’t have the insights necessary to make a good buying decision. Either way, I don’t see how someone like that will survive in today’s world.

ENTREPRENEUR: The bottom line is this is not a world where a salesperson walks into a retailer with a checklist of products and asks them to pick and choose what they want to buy. Today’s world of integrated solutions almost by definition need to be developed, sold, and implemented as a partnership between the retailer and the provider.

EDITOR: What are your thoughts on the ever-increasing involvement of procurement in the LP buying process?

SUPPLIER: This can be a land mine for loss prevention industry executives. If you get the purchasing department controlling your ability to buy integrated systems—say it’s life-saving systems like burglar alarms or fire alarms—if it’s all about price, the same way they buy pencils or toilet paper, you can have major problems.

RETAILER: That’s true, but in the modern world, as an LP executive in a major corporation, you’re going to have to deal with procurement because that’s just the way of the world. The better relationship you have with your procurement team, the better they understand your business, the better it’ll go for everybody. If the only thing your procurement team cares about is price, you’re in a world of hurt. Price will always be a factor, but it’s also about service, relationship, quality of product, quality of solution. Your job is to educate that procurement team, and if you’re good at what you do, hopefully, you will win them over.

EDITOR: There’s often a third spoke to this buying process. What’s the role of IT today with procurement and LP in the buying process?

SUPPLIER: IT is the check valve for the success of integrated loss prevention solutions. IT is their own little world that they want to control. And you can’t blame them, given all the things that are happening with identity theft, stealing of credit card information, and whatnot. They try to make their network the Fort Knox of the information highway. The need for the LP executive to be on the network to do his job effectively will only get greater with RFID, video analytics, and big data becoming the preeminent tools for LP to have insight into shrink. I think you’re going to see more and more that LP executives are going to need their own loss prevention IT person who talks the same language to ensure that all of the network-critical LP systems run smoothly.

ENTREPRENEUR: I think that it’s critical to have a strong IT partner, just as it’s critical to have a strong procurement partner. Because most of the things that are being installed and purchased today are connected to the internal networks, you have to have a strong IT partner who understands what it is you’re trying to do and can support you in getting the solutions implemented. I also see a trend of pushing more of these solutions outside of the business, whether they’re cloud-based or otherwise externally hosted type solutions. In many cases, IT is glad to have that off their plate.

EDITOR: There’s always been talk about investigations and handling big cases. For young people starting off, a lot of time can be spent there. Is being a great investigator a critical element of getting ahead in this business?

RETAILER: I don’t think so. I think it probably played a bigger piece in past years. I think it’s not a bad thing to have in your satchel, but I don’t think you have to be a great investigator to be a successful retail exec.

ENTREPRENEUR: There was a time when having a big-dollar case gave you more notoriety or maybe got you a little more noticed, but it’s no longer just about finding the big ORC case. It’s also about understanding the business, which is part of being a good investigator. My definition of investigator would not just include the ability to solve a case, but also the ability to investigate how the business works. You have to understand how positions work and how merchandise gets from point A to point B. There are elements of being an investigator that are included in that, that might solve a $200 shrink problem or it might solve a $20 million shrink problem, but those skill sets need to be honed, and they are what will make you a success in the field of loss prevention.

SUPPLIER: The customer is going to drive how the retail world operates in the future, and that holds true for investigations. Today you have online purchases, in-store pick-up, and, in the case of an Apple store, the customer pays for merchandise with a tablet as he walks out the door. Loss prevention industry executives are going to be challenged with investigating where theft is going to take place in the future, and it’s going to be vastly different than it is today.

EDITOR: We’ve talked about the value and rapid evolution of technology as well as the importance of people. Where do you put your money first—technology or people?

RETAILER: I think you have to go with people. Obviously, in this day and age you have to have both, but if you don’t have motivated, sharp people, what good is technology going to do you? If you don’t do anything else, you lead with people, because people are the ones that make the technology work. If you’ve developed a motivated staff that knows the business, they can quickly adapt and learn the technology.

ENTREPRENEUR: It’s a tough question. It’s almost a chicken-and-egg thing, because you can have all the great technology, but if you don’t have the right people running it, then it doesn’t do you any good. And, quite frankly, you can still create a good loss prevention environment without the technology if you needed to. So it starts with people, working with people, in order to prevent the loss.

SUPPLIER: If the edict from the C-suite is that you are going to invest in technology to cut people, loss prevention executives are going to have to think about the skill sets of the people they’re going to invest in. Executives are going to be challenged with investing more money in entry-level LP people with different skill sets.

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EDITOR: I feel a lot of passion in all three of your voices. Are there ways that you, or others in this industry, can give back to loss prevention?

SUPPLIER: I believe the best loss prevention executives have their eyes open and are attuned to people who appreciate the loss prevention industry as a profession and support the profession objectively without personal gain. When a vendor gets involved in an evolution that helps the loss prevention profession without personal gain, people pay attention. People get that. What that does is give you credibility and access down the road to those loss prevention executives.

ENTREPRENEUR: I think it is definitely important to give back. For most of us that means getting involved, whether with mentoring or participating in loss prevention industry initiatives—things like the LPRC, Loss Prevention Foundation, NRF, RILA, or FMI, where you are involved in committees, councils, or research. It’s important to make yourself available as a resource, as a testing ground, as a guinea pig, or as a mentor. I think it’s very important to the success of the industry, to the success of the individuals who are coming behind you, and to your own personal success.

RETAILER: Going off that, of course giving back produces all of these great things for the loss prevention industry, but I think it’s important to remember that it’s a two-way street, because in any of the ways you get involved, you learn, too, right? And I think we all know there are certain companies out there in the retail business that are very insular. They don’t reach out much, they don’t get involved with the industry much, and I would venture to say that I think those companies are not as broad and as informed and as well-off compared to those who do get out and do learn. If you’re on committees, if you’re involved with NRF, you learn all sorts of stuff that you didn’t know, you learn about how other people do things.

SUPPLIER: And as a solution provider, you are limiting your success by not taking advantage of the opportunities to be involved with all these different organizations and industry initiatives, if nothing more than the exposure that they give you for your company. But the real value comes from that opportunity to work with the retailers and get inside and understand their issues so that you’re bringing the right solutions, and hopefully, the best solutions to the market.

This article was originally published in 2014 and was updated October 3, 2016.

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