Growth, Progress, and Reinvention: Asset Protection at Canadian Retailer Mark’s

It's not easy to introduce asset protection policies to a retail chain in which there were previously none.

Mark’s is a retail chain that has succeeded in rebranding itself, amazingly, without alienating its original core customer base. It has achieved an impressive result—a complete reinvention of its brand, as well as its asset protection strategy—which is not easy for any chain to do, much less one that was inexorably linked to the Canadian West, a place where change is not always welcomed.

To understand what Mark’s is, you need to understand what Mark’s was. Originally founded in the Western Canadian city of Calgary in 1977 by a former Hudson’s Bay executive, Mark’s soon evolved into what would be known as Mark’s Work Wearhouse for the better part of three decades. Mark’s Work Wearhouse grew hand-in-hand with the burgeoning oilfield industry that pervaded the Canadian West and still does to this day. Where Mark’s was strongest was where the oil flowed the most, namely, Alberta, Saskatchewan, and Manitoba.

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In the 1980s and ’90s, Mark’s was a chain of stores with a loyal following of mainly blue-collar laborers. Its store shelves were overflowing with work-related apparel, such as boots, winter coats, overalls, and other industrial fashion. Its products were proudly worn by construction workers, oilfield laborers, and welders—workers of all stripes who wanted solid, reliable clothing to endure the rigors of their jobs.

This all changed the early part of this decade, with the emergence of Mark’s without the “Work Wearhouse.” The company decided to rebrand itself and pursue a broader range of product, including women’s wear, men’s casual wear, and some children’s apparel, while still catering to and respecting the laborer around which the store chain was originally built. By all accounts, the transformation of a blue-collar-worker-oriented store into a full

CalgarySkyline

Mark’s Work Wearhouse originated in Calgary, primarily serving the blue-collar workers in the Western Canadian oilfield industry. Mark’s remains headquartered there.

family retail store was a success. Mark’s now boasts close to 400 stores nationwide.

If you thought that in the rebranding, they may have forgotten the Canadian laborer who made them who they are, you’d be wrong. Select Mark’s stores contain a freezer within the store where you can try on a coat and see how warm it is before you buy it. You can thank the ubiquitous Canadian laborer who’s had to toil outside in freezing temperatures for that store feature.

The Need for Asset Protection

Like most companies that were started by a single founder as a private enterprise and then experienced rapid growth, Mark’s hadn’t given much thought to retail loss prevention over the years. In fact, it wasn’t until 2010, almost 30 years after Mark’s Work Wearhouse was founded, that any real consideration was given to the topic.

“Mark’s went from having no asset protection to quickly recognizing the need for it,” said Wendy Bennison, former vice president of national operations for Mark’s. Bennison was one of the key members of the team that was instrumental in the rebranding effort.

Initially probing the industry to see what other chains were doing about loss prevention, Bennison decided to recruit LP-industry veteran Andy Buchanan, who at that time had been with the company for almost three years. Buchanan was installed as associate vice president of asset protection for Mark’s, a position that previously didn’t exist. While Buchanan had worked in senior LP management positions at retail giants Home Depot and Eaton’s, he had his work cut out for him at Mark’s, where asset protection was, by all accounts, an afterthought until his arrival.

A Corporate Transformation

As if the prospect of reinventing a Canadian icon wasn’t enough, Bennison understood that building an asset protection organization was critical to

Wendy Bennison

Wendy Bennison

the future of the rapidly expanding retail chain. “It wasn’t hard to build a case for an asset protection department,” she stated retrospectively, referring to Mark’s ballooning shrink numbers. Mark’s had all the issues that plague any retail chain, from internal theft and refund fraud all the way

to organized retail crime.

Armed with a management team in the C-suite that gave him their full support, a decent budget, and a clean slate with which to work, Buchanan immediately launched into his portion of the corporate transformation. “We started with two things,” explained Buchanan, “exception software and cameras. Those were the low-hanging fruits.” While building up his team, Buchanan put a huge initial emphasis on data analytics, specifically exception-reporting software.

“We wanted to know, for example, all the times in the past six months that a given cashier had interacted with a certain credit card number,” stated Buchanan. “It may not necessarily be a bad thing; that situation might happen with a return customer. But if that same cashier refunded that same credit card multiple times in that time period, we want to know about it.”

Andy Buchanan

Andy Buchanan

Like other companies where the loss prevention department was either nonexistent or ineffective, the previous climate at Mark’s allowed a healthy amount of internal theft to flourish before Buchanan came on board. Mark’s suffered from the effects of a small percentage of personnel who were essentially professional thieves, defrauding the company for significant sums on a regular basis.

“The first year or so was like shooting fish in a barrel,” said Buchanan of his early efforts, which resulted in a massive shakeup of the internal theft activities, netting many prosecutions and saving the company hundreds of thousands of dollars in losses. “We introduced the new software. We campaigned it. We went around to the stores and told everyone what it could do. We educated the employees about it. And still, we would catch the odd person trying to steal,” said Buchanan. Major gains, but as any asset protection professional knows, eliminating internal theft 100 percent is an unrealistic goal.

Still, Buchanan claims that during his tenure, the size of the internal thefts shrank dramatically. Previously, a typical case would be in the $6,000 to $10,000 range, whereas under the new system, the average case was in the $800 to $1,200 range. This is because would-be thieves are caught much sooner than they would have been under the old system.

Additionally, Buchanan made sure that each member of his team was schooled as a Certified Forensics Interviewer (CFI) to ensure that internal investigations were conducted thoroughly and accurately. Investigations conducted by Mark’s now typically result in criminal prosecutions rather than simply termination: the only result a dishonest employee would have faced under the old regime.

Growth Progress and Reinvention

Thermal imaging cameras allow traffic counting to help merchandisers evaluate product preferences and display effectiveness.

Attacking Crime from the Outside

After addressing the internal issues, Buchanan spent time beefing up Mark’s resistance to crime coming from outside the company. He used most every means at his disposal to harden Mark’s stores into places that are hostile to shoplifters and organized retail criminals.

Some of the changes to combat crime were simpler than others. Buchanan borrowed some of the tricks from his previous employers. Changing Mark’s refund policy is an example. “We revised Mark’s refund policy in 2010,” explained Buchanan. “Previously, you could grab a pair of jeans off the rack and walk them up to the cash register with no receipt and get a full cash refund. Now, if you don’t have a receipt, you only get store credit. “

The ongoing implementation of a comprehensive system of cameras and video analytics is a much more involved task.

External theft, especially organized retail crime, remains a thorn in Mark’s side, much as it does for any other retailer. Buchanan decided to partner with Toronto-based i3 International to attack this problem.

The experts at i3 International brought to the table a linked collection of tools to help Mark’s AP department better do its job. The magic of the solution is not so much any one component, but a system that links multiple components, including DVRs, cameras, thermal imaging, and other bells and whistles, into a powerful tool that transcends pure asset protection.

Growth Progress and Reinvention Image 6

Select Mark’s stores contain a freezer within the store where you can try on a coat and see how warm it is before you buy it. You can thank the ubiquitous Canadian laborer who’s had to toil outside in freezing temperatures for that store feature.

Expanding the Success of the AP Department

To realize the enormity of this project, one needs to keep in mind that asset protection at Mark’s was introduced in force nearly three decades after the foundation of the company, and there were more likely than not more than a few old dogs who needed to be taught new tricks among the ranks of Mark’s employees.

The fact that Mark’s organization is composed of a large number of career employees makes the company as unique as the brand itself. “In all my years in asset protection, I’ve never seen a company with the sheer number of long-term veterans of Mark’s,” said Buchanan.

Now that the heavy lifting of getting an asset protection department off the ground is complete, the policies and procedures are in place to keep Mark’s shrink low for years to come. But that’s not where the work ends. The asset protection department must cooperate with operations more than ever, leveraging technology to assist operations by helping store managers analyze the efficacy of store displays.

As many AP executives understand, once you have theft and fraud under control, you tend to find ways to use your team and skills to make the company run smoother in other areas; another way that loss prevention departments add value and help enhance the bottom line.

It’s not easy to reinvent an iconic store chain, and certainly not easy to introduce asset protection policies to a good-sized retail chain in which there were previously none. But by all accounts, Bennison and Buchanan succeeded in doing just that. Mark’s stands as a shining example of just what can be done to improve a retail chain…even long after its founding.

This article was originally published in 2012 and was updated April 26, 2016. 

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