Tag: retail shrink
In the retail environment, the term “shrink” or “shrinkage” refers to the difference between the amount of merchandise (or inventory) that the company owns on its books, and the results of a physical count of the merchandise. Shrink can come in many forms, and impact a business in many different ways. The primary causes of retail shrink include operational errors, internal issues, and external losses.
• Operational errors can involve POS software glitches, paperwork issues and other operational missteps. These incidents typically occur when processing a transaction, receiving merchandise, shipping merchandise, or taking inventory.
• External losses can involve theft by customers (primarily shoplifting), issues involving vendors, or other incidents that pertain to those not working for the company.
• Internal losses are the result of incidents that involve store associates and other company employees who take advantage of opportunities to steal from the company.
In addition to theft issues, damage, waste and spoilage can directly contribute to a company’s losses.
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When merchandise is stolen or otherwise unaccounted for, it not only impacts the company as a result of the missing product, but also skews our inventories in other ways. This not only impacts current sales, but also affects product replenishment and future sales as well. This can have a significant impact on the bottom line, and a direct influence on the health of the company. Every year, shrink issues cost retail businesses tens of billions of dollars. This is a real and growing problem that affects all of us in a variety of different ways.
This is a much more complicated problem than simply accounting for the theft of merchandise and the direct loss of profits. Managing shrink is a critical aspect of inventory control, which involves the management of the supply, accessibility, storage, and delivery of the company’s goods. As a result, retail shrink reduction strategies require a multifaceted and broad-based approach in order to successfully manage the process.
Checkpoint Systems and IMCo, a Germany-based global leader in smart shelf technology offering loss prevention solutions to help retailers combat organized retail crime, recently announced an agreement under which Checkpoint will resell select IMCo products in North America.
Under the agreement, Checkpoint will market the following solutions, which are ideal in Read More
By Erik Nelsen
The bedrock upon which healthy retailers are built is the supply chain that provides the goods to be sold. A retailer’s competitiveness, then, or lack thereof, is in measurable part a reflection of the extent to which these avenues of supply are cost effective and efficient.
The responsibility of a supply-chain Read More
Few things are as frustrating for a loss prevention leader than discovering a bad packaging design they know will promote retail shrink— a feature which could easily have been prevented if those who created and approved the packaging had included shrink reduction in the initial design criteria.
For example, in a store, Read More
In an industry as dynamic as retail, asset protection leaders have long been faced with the daunting task of keeping pace with the changing landscape of the industry. This has never been more true than it is today.
Safeguarding company assets is no longer synonymous with simply catching shoplifters and requires Read More
The evolution of the loss prevention profession has required a change in the way we approach the retail environment. First, we now recognize that inventory shrink is a more complicated problem than mere theft of merchandise. Shrink is a complex issue. Shrink reduction is now seen as a vehicle of profit Read More
Most retail companies have a department dedicated to maintaining processes and procedures related to inventory management and retail shrinkage. The inventory control department ensures that optimum inventory levels of products are available and accessible to the stores; that stock levels/turnover are efficiently managed; that inventory is maintained in a safe Read More
Understanding how to calculate shrinkage in retail is a fundamental but critical concept within the loss prevention profession as well as throughout the retail industry. Ultimately, retail shrink results in lost profits and can have a dramatic impact on the success of the retail enterprise.
The term “retail shrink” or “retail Read More
By Dan Faketty
I remember walking into the office for the first time. A new company, a new position, a new city. The size of the building and the sophistication of the other associates were somewhat intimidating.
I arrived at 6:00 a.m. sharp to make a good first impression. Soon it was time to Read More
What is the issue facing retailers regarding boosters and fences? There seems to be confusion over whether boosting or fencing goods is the primary cause of retail shrink. Is this issue one of those questions that we can break down into bite-sized pieces, make mathematical comparisons, study historical data, and Read More