Like the British referendum vote earlier this year, the election of Donald Trump in the United States has sent tectonic waves not just through the individual countries but also around the globe. With the unexpected results of both votes, we in the retail trade industry are left with more questions than answers as to what comes next on a variety of subjects.
For the retail loss prevention and profit protection industry, it remains business as usual—for the time being. Employee theft will continue as will shoplifting and organized retail crime. Compliance to internal and external regulations will remain a focus as will safety of customers and employees.
However, the anticipated changes, especially in global trade and immigration policies will undoubtedly have a major impact on the retail environment and, thus, on loss prevention policies, logistics security and processes, and retail hiring.
Over the past decade, perhaps longer in Europe, loss prevention has played an integral role supporting retailers’ acquisitionand sourcing of manufacturing materials and transportation of merchandise from point of manufacture to store shelves. Trade partnerships and international agreements have by most accounts helped streamline the flow of goods. Yet renegotiating or even bowing out of these trade agreements entirely, which certainly was a primary focus of Trump’s campaign, could have a tremendous impact on both the flow and cost of goods.
The nationalist movements that stoked both campaigns—and are alive and seemingly empowered in other countries throughout Europe—are hoping to return jobs to their home countries, jobs that they believe were outsourced to lower-wage nations in Latin America and Asia. Whether or not jobs return or remain outside the country, prices of goods will almost inevitably increase on the merchandise retailers sell, especially if tariff wars erupt as some experts predict.
Debate will continue as to the long-term benefit of changing trade policies, but there is no disagreement that retailers and their customers will be affected bothin the long and short term. Prices will likely fluctuate dramatically both up and down. On-shelf availability—one of the
LP industry’s major objectives—will be even harder to manage. Consumers will likely find goods unavailable in their neighborhood stores as well as online more frequently than today. Theft of products in high demand yet low availability will beadded to the “hot products” on organized retail crime gangs’ target lists.
I am certainly no economist or trade expert. Even if I were, based on the wide-ranging opinions voiced by those who are, there is no way to predict how the next few months and years will unfold. That said, the entire retail organization, including loss prevention, should begin an ongoing dialogue both inside each company and throughout the industryto look at policies and procedures and contingency plans to be able to proactively manage the changes as they occur.
Just as we prepare for natural disasters and terrorist events in our crisis management and business continuity planning, we should take a similar approach to these political upheavals. In fact, based on the extreme outcry from both sides after these recent developments, some might argue that these are indeed crisis events no different than an earthquake or hurricane, yet with much more far-reaching impact.
What is your take on the impact of these political changes? Are you discussing the impact inside your company in a formal way? We would love to hear from those on both sides of the Atlantic to help the retail industry begin dialogue on this important issue.
This article was originally published in LP Magazine EU in the Winter 2016-2017 issue.