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As your organization grows, the number of incidents that negatively impact your people, assets, and profits will grow right along with it.
You need only look at shrinkage to get an idea of the size of the loss challenge that retail faces. Recent numbers from the National Retail Federation estimate the average shrink rate at 1.38%, for an industry-wide total of $45.2 billion. That’s a big number—and it’s getting bigger. But when you add to that the additional risks associated with cyber breach and the protection of payment card information, it becomes very easy to realize the true scope of security, risk, and compliance requirements you’re facing. If you’re not working to make your asset protection or loss prevention function more effective, you’ll continue to suffer lower profits, lower employee productivity, and lower customer satisfaction than your competitors.
If you’ve found yourself looking to improve the effectiveness of your retail loss prevention processes without increasing costs, you’re not alone. One way to do that? Software.
Effective loss prevention software can provide you with the tools you need to plan, prepare, respond, and recover from loss events—so you can do more with less. And make no mistake… You do need to do more. Leading loss prevention functions have systems in place for risk, policy, control, audit, incident, and investigations management. Without a complete system in place, it’s that much harder for you to monitor, analyze, and improve the effectiveness of your control environment to deliver optimal loss prevention with minimal spend.
Additionally, and most importantly, effective retailers take a holistic approach—for them, loss protection means protecting all assets from loss. So it’s not just about safeguarding inventory from shrinkage, in other words; it’s also about keeping customers and employees from harm.
If you’re considering using loss prevention software to help you increase the effectiveness in which you track and manage these tasks, processes, and procedures… read on. You’ll learn not only how to better plan for, prepare for, respond to, and recover from loss using software—but also why you should.
It goes without saying that the objective of any loss prevention program is to prevent loss. But to prevent loss efficiently, you need to do more than just react to incidents as they occur. You need to think strategically about the risks that your people, assets, and profits are exposed to at the store level, so you can identify your most critical and impactful risks.
Retailers face many different risks, with widely varying impacts. In order to best prepare, allocate resources, and implement changes, managers and executives need to better understand the risk their organization specifically is exposed to.
However, as loss prevention teams are stretched to do more with the same resources, being able to assess risk in a simpler way becomes increasingly important. With a finite budget, you need identify your highest impact opportunities to implement changes, polices, and controls.
Software can help you assess and uncover your highest impact risks, so you can determine where to implement policies and controls. Doing so will help you maximize your existing resources and increase the effectiveness of your team’s protection—without increasing your team’s operating costs
Developing controls that focus on the most risk-prone areas of the business will help establish policy and procedures to prevent loss. Without those in place, after all, you can’t be sure that your risk management efforts will be effective.
But how confident are you that these controls are working as intended? Or that your policies and procedures are actually being followed and practiced—when and where it matters?
Case in point: a Verizon study found that just one-third of companies that had achieved PCI DSS compliance were able to maintain it in the following year. And in the data breaches examined in the study, not a single company was fully PCI-compliant when the breach occurred.
The best loss prevention functions have a system in place to audit policies and controls, ensuring they are both effectively preventing loss and adequately prepared for worst-case scenarios—and continue to do so.
Loss prevention software can support these efforts, allowing management to document policies and controls, audit their effectiveness, and enforce them all the way down to the store level.
It’s one thing to identify risks and put in policies and controls. But in order to truly see their impacts, you need to properly track loss events at the store level so you can better prepare for those risks and review and improve your policies and controls.
That’s where holistic incident reporting enters the picture. To take a holistic approach, you need to focus on protecting your inventories, yes, but also on protecting your employees and your customers. That means your incident reporting system should support a wide range of incidents: not just shoplifters, for example, but everything that impacts your customers, employees, and stores. Slips and falls, harassment, employee theft—all of it.
Because with a stronger emphasis on protecting people in a retail setting, you’ll have an organic impact on your company or store’s bottom line. But you’ll also see benefits from the intangible factors not found in a shoplifter’s bag or in a targeted till—employee morale, customer satisfaction, and workplace safety will all benefit.
Proper incident reporting software can support high quality data collection. The best software suites are simple enough that anyone at the store level can input data efficiently, with minimal training and technical abilities.
This is important, because the quality of your reports is directly related to the ability of your managers, directors, and investigators to fully understand the risk to which your people, assets, and profits are exposed to.
Incidents often don’t “just happen”; they’re frequently driven by underlying issues. Failing to connect the two can lead to a misplaced focus on the symptoms of a problem—not the cure.
When investigators connect underlying issues, good things happen. Organized retail crime rings are discovered and apprehended. Employees abusing discount privileges are identified and reprimanded. Weaknesses in store security will be discovered and improved… Losses will be mitigated.
But that’s just about situational awareness. What actionable insights can be drawn from all this data?
You need to thoroughly analyze your incidents to gain a true situational understanding of the impact loss events have on your organizations bottom line.
Do you know which controls are working? Whether policies are creating more problems than they are solving? Why certain assets more vulnerable than others? How you can minimize loss intelligently?
With the detailed analysis that software can provide, you’ll be able to answer these questions and gain an understanding of what is working and what isn’t—so you can fix underlying issues and move from situational awareness to situational understanding.
Software that integrates incident reporting, investigation management, and advanced data analytics tools will help you manage incidents and identify and follow-up on issues in real-time. You’ll prevent more problems from happening, make smarter decisions, and more easily capitalize on opportunities you might have missed.
That means you’ll be able to better protect your people, property and information across the entire organization—and see lower loss as a result.