Are you in charge of your company’s technology budget? How do you know whether the new loss prevention equipment you’ve just rolled out in five stores is performing as it should? What metrics are you using to gauge its success?
Today’s LP practitioners must be able to provide justification for their technology choices, and evaluating new loss prevention equipment for its effectiveness is the best way to determine whether it is having a positive financial impact. Tom Meehan, CFI, considers two primary methods for testing a new technology’s impact in his most recent Future of LP column for the November-December 2016 issue of LP Magazine. From the column:
Consider the use of electronic article surveillance (EAS) tags; it may vary in effectiveness due to the type of theft risk in particular locations. Sure, EAS tags will likely scare off the opportunistic shoplifters, but will it have the same impact on organized retail crime (ORC) offenders? By taking a look at data for your locations, you can invest capital more intelligently than arbitrarily assigning new technology to your top-shortage stores. There are many ways to test a new product to come up with valid conclusions, but it essentially falls into two main categories: pre/post (crossover) testing and comparable-store (parallel) testing.
Crossover testing occurs in two time periods—before and after the technology is introduced. This is the most powerful study design because we can see how our metrics change with the introduction of a new technology in a store. Before the tech is installed, we get to see what baseline activity is like for a particular metric, and after the tech is installed we can see its direct impact on our metrics of interest. This also allows us to use significantly smaller sample sizes when compared to a parallel design.
Meehan admits that designing pilot studies and testing new loss prevention equipment can have its challenges. He emphasizes the importance of finding the right personnel for the job – someone who can leverage available information sources to extract useful insights. Check out “Going Beyond the Gut: Fact-Based Research” to read the full column. You can also visit the Table of Contents for the November-December 2016 issue or register for a free subscription to the magazine.