LP Team Finds Value in Clichés as It Takes Aim at ORC

Professional buzzwords and clichés can be eye-roll inducing, but there is good reason why “buy-in” and other management mantras become popular. Especially when building a team from scratch, they often are exactly what is needed.

John Goldyn
John Goldyn

“Two-and-a-half years ago, organized retail crime was not part of our vocabulary,” explained John Goldyn, senior director of loss prevention at Ulta Beauty. But as the retailer quickly grew, so did their losses. Theft of high-demand, easy-to-resell products were beginning to have to a material financial impact. “We started to get really concerned about the rise in ORC groups at the store level,” said Goldyn.

The company’s journey to support stores in the fight—to help them manage the difference between shoplifters and professional criminals—followed a traditional management roadmap to success.

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“Synergy,” “Buy-in,” “Socialize”

Building an ORC-fighting capability at Ulta Beauty began with the collection of financial data that allowed LP to distinguish between theft types so it could relate the story of how professional criminals differed from shoplifters. “One of our first jobs was to let everyone know how it affected us,” Goldyn explained during a presentation, “Building ORC Capability at Ulta Beauty” at the Global Retail Crime Summit in July. “Good intel is needed to set the stage to secure support of the stores and to sell the idea to the C-suite.”

Its strategy for reshaping the perception of store theft was akin to the one Microsoft used to rebrand its global security operation several years ago—personalize risk to senior management. Like many organizations, Microsoft had traditionally planned security around singular events and specific threats, rather than treating it as a core organizational principle. But by personalizing risk to stakeholders, the security team paved the way for a sustained security effort, according to the company’s former physical security group manager in its global security group.

For nearly a year, LP leaders at Ulta worked to educate stakeholders all levels of the retail organization. Part of the process included an ORC summit, which generated interest, allowed executives to ask questions, and helped secure their buy-in. It was part of a dedicated effort to inform leaders on “what they could do to offer support, and then spread it out into our culture,” Goldyn said.

It’s an important point, as research has shown that even when senior managers are on board with security, it doesn’t always filter down through the organization. As a result, “staff may resist efforts to support security initiatives unless they personally see things go wrong and they need help,” suggests a study by Perpetuity Research & Consultancy International, Beyond the Protection of Assets: The Broader Benefits of Security. Getting as many people on board as possible helps embed the fight against ORC into the organization. “We learned that lots of people have the ability and interest to support the effort,” said Goldyn, noting that its cyber security experts have been a particularly valuable part of building an effective operation to combat ORC.

As Ulta Beauty’s LP team built the foundation, it faced expected challenges, including the need to re-educate managers because of turnover, helping store teams to understand what they needed to do differently in handling theft cases involving professional criminals, and dealing with unconscious bias training and development. Keeping consistent contact with store operations on how the ORC team building project was progressing—and where it was heading—was an important part of keeping their support, suggested Goldyn.

Tony Sheppard
Tony Sheppard

LP also needed to build-up its own capacity, by developing relationships with solutions providers and turning executive interest into additional technology assets and ORC field operatives. It also resulted in hiring Tony Sheppard, a longtime industry expert previously with CVS, as its director of organized retail crime. Although hired to head up a fledgling unit, Sheppard said he could sense the good groundwork as he came on board just as the pandemic started to roil. “Executives already had that knowledge [of ORC] and had bought in for the most part,” he said in the Crime Summit presentation.

“Drill down,” “Loop back,” “Pain point”

Provided a solid internal foundation, Sheppard took to enhancing external relationships, including with other retailers, law enforcement, prosecutors, and industry organizations, to help Ulta Beauty gather intelligence and pursue cases. “The collaboration piece is huge,” said Sheppard, noting that he thinks the industry can still do a better job of it. “Finding ways to share information is critical,” he said. “When it comes to crime, we’re not competitors.”

He thinks greater participation from smaller LP teams would help. “Companies that maybe have a smaller ORC team may think they can’t participate, but they have a lot to offer. They may not have someone who can do the field work but may have the video.” Smaller retailers also have a lot to gain from participating, as organizations like the Coalition of Law Enforcement and Retail (CLEAR) can provide them with access to law enforcement and experts in external retail crime and provide support with case closures.

In all cases, including with juveniles, building as broad a case as possible is the goal, suggested Sheppard. A good reporting and investigative platform can help a unit to build the case, secure law enforcement involvement, and get prosecutors to understand and follow it.

“It’s important, from my perspective, to pursue cases from A to Z, and follow through the entire process to prosecution,” explained Sheppard. “I’ve heard others suggest the only important thing is to take the head off the snake, but a booster isn’t going to go wash cars. I think you have to follow through on those cases and articulate that to the company,” he said, a point that Goldyn emphasized. “We need to make sure that the stores know that as long as they do their job [handling ORC criminals] that there is a team working those cases.”

Information, Expectations, and Reporting

Three critical aspects to forging a successful ORC effort are information, fair expectations, and results reporting, according to Sheppard. “You can’t work any case unless you have the information. We’re relying on store management to report it, but you have to be realistic [of what you can expect from them] and make it as easy as possible for them to put in the information,” he said. “Then articulate that you are responding to the information and let them know that someone is going to look at it and do something about it. If they see the results, it builds credibility, which builds even better intelligence.”

That will be needed, Sheppard thinks. The same old challenges remain, he said, but he also thinks the COVID-19 crisis could democratize ORC, where smaller markets start to feel the pain that big cities have experienced. “You’re starting to get hit in areas that weren’t an issue from an ORC standpoint before,” he said. While most companies aim their ORC effort at big-city targets, he thinks it’s becoming more important to educate stores in all markets and to take a wider geographic look at the problem. It will be a challenge. Sheppard thinks the onus will continue to shift from law enforcement to retailers for building cases, doing field work, and perhaps even presenting cases.

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