Retail is a business, and businesses are in business to make money and enhance profits. But profit enhancement is a multifaceted concept. We build our profit base not only through our ability to sell products, but also by learning the best ways to approach shrink reduction in retail stores.
Historically, the relationship between retail sales and our shrink reduction programs have been viewed differently—almost as if they were two different sides of a coin. But the best retailers and most successful loss prevention programs have learned that these two concepts not only complement each other—they often follow the same path.
Loss prevention was traditionally viewed as the “bad guy” catchers: those who spend the lion’s share of their time pursuing shoplifters or investigating internal theft issues. Unfortunately, these are real and ongoing problems that must be addressed.
However, loss prevention departments are no longer built on the premise that the best way to reduce our losses is to simply catch the thieves. We’ve learned that our most successful approach is by increasing awareness and teaching our store teams how to avoid and deter theft—and other forms of loss—from occurring in the first place.
This all begins by understanding a basic but essential concept of the retail business: friendly associates can function as theft deterrents.
Do you want to know how to reduce inventory shrink in retail? Everything starts by building upon the most fundamental aspect of the retail business: customer service.
Customer service drives retail success and is an essential element that sets the stage for reducing shrink.
Building on Solid Ground
Quality customer service is the cornerstone of any successful retail organization and is a critical aspect in a company’s ability to generate business and maintain profitability. Organizations consistently refer to the importance of the process by which products and services are delivered to our customers, and the role that the assistance and courtesy of our salespeople plays with those that patronize our business.
Good customer service is all about enhancing the customer experience whenever our guests visit our stores.
It’s about taking the extra step to meet the customer’s needs.
It’s about creating an atmosphere that’s pleasant and welcoming.
It is a commitment to providing value-added services to include attitude, support, product knowledge, efficiency, and professionalism.
But it’s also something more. Good customer service is all about bringing customers back. It’s about establishing a rapport and building an impression that encourages repeat customers, and those who pass on that positive feedback to others. This is what determines our success. This is what builds our business.
Excellent customer service is achieved through a process that includes a well-conceived service strategy, customer-driven systems, and customer-friendly people. Separate from specific product and service needs, however, customers all have basic expectations for how they should be treated.
It is essential to be aware of the actions and behaviors that customers consider important when interacting with our sales team:
- Personal Recognition – Customers want to be treated as valued individuals. While they might not always want personal assistance, they want to know that it’s there for them if they ask. They want to know that we are attentive and close by if they need us.
- Courteous Treatment – Courteous and polite treatment is something that is expected and should be extended to every customer. There’s no excuse for being rude. Be friendly and smile.
- Respect – There is no situation in which it is acceptable to treat your customers with a lack of respect. Respect should guide every interaction with our customers.
- Knowledge – Customers are most comfortable dealing with associates who know their products and their store, and can comfortably and confidently convey their message.
- Empathy – Whether shopping the store, searching for products, or interacting with salespeople, customers appreciate it when you try to look at things from their perspective. Taking the opportunity to look at a situation through the customer’s eyes can make all the difference.
- Understanding – Customers need to feel understood. They want us to listen and pay attention to their needs. Understanding what the customer is looking for keeps them engaged and keeps them coming back.
- Professionalism – It’s important to remain positive and professional in all customer interactions. Your behavior and conduct will have an impact on how the customer will view the professional tone of the company as a whole.
- Awareness – Every aspect of the retail business has an impact on customer service; not just those that involve face-to-face customer contact. Developing an awareness of how the entire package comes together to drive the customer experience in the store builds customer service excellence.
Many factors impact the overall success of a business. Regardless of the type of retail store, the importance of good customer service cannot be underestimated.
Employees who have the ability to convey an honest message, show that they care, and are able to interact with and assist customers will not only drive customer sales; they will keep our customers coming back—and encourage them to recommend our business to others.
How to Employ Associates as Theft Deterrents
So what does all of this have to do with loss prevention? It turns out that strong customer service is one of our most effective tools and most proactive means to control theft and other losses on the retail selling floor.
Focused, friendly and attentive salespeople who are able to successfully interact with the customers drive business excellence from every possible perspective. Quality customer service is an integral component of any successful loss prevention program.
This is a shared goal that will have a direct bearing on sales, shrink, and overall business profitability. By requiring our associates to maintain quality customer service, loss prevention benefits become a byproduct of good business management.
Don’t forget to smile. Smiling is an important part of the customer service experience. By the same respect, it is a valuable tool when attempting to deter potential theft incidents.
Smiling sends many important messages. A smile is a sign of confidence and control. A smile is friendly and non-confrontational. A smile can help you to manage your emotions and your demeanor in potentially difficult situations. Many unpleasant situations can be avoided by using a smile when we greet and speak with customers.
This type of cause-and-effect approach to loss prevention is a key component of effective loss prevention management. Applying the principles of loss prevention on a global scale and showing the relationship of good loss prevention practices with other aspects of the business will greatly improve the efficiency and effectiveness of your efforts—and help build strong working relationships with other areas of the business.
This post was originally published in 2016 and was updated April 23, 2019.