Culture change Is retailers' number one priority in battle against shrinkage

The UK's top retailers view creating a positive staff attitude towards loss prevention as their number one priority in the battle against rising shrinkage, according to new research.
The Retail Fraud Study, run by Retail Knowledge in association with retail solution providers Volumatic and RGIS, found that retailers view creating an intrinsic culture of loss prevention in their organisations as key in tackling their losses of 3.4 billion due to theft and fraud. The study worked directly with 100 of the UK's top retailers including Tesco, John Lewis and Marks & Spencer's accounting for 42% of the total UK retail space and took 600 hours to complete.

Paul Bessant, Managing Director at Retail Knowledge, commented: "Last year retailer's losses due to criminal activity nearly matched pre-tax profits as a percentage of sales of which nearly a fifth was attributed to their own staff. However on the flipside 40% of all criminal activity in stores was reported by honest employees and this has made retailers realise that their staff can play a critical role in reducing losses. As a result retailers are starting to promote a healthy attitude within their organisations, to create a positive culture of loss prevention amongst staff, and prioritising a comprehensive approach to reducing losses."
60% of retailers believed creating a culture of loss prevention could reduce their losses with 20% making it their number one priority. Many of those who identified creating a culture of loss prevention as a priority said that staff training programmes to raise awareness of issues across the business as one of the best methods of reducing shrinkage.
Bessant added: "What became clear is that Loss Prevention Executives are trying to expand their influence across the business by changing employee culture and increasing the reach of loss prevention within their organisations. This is recognising that a comprehensive approach to reducing shrinkage would be more effective than the fragmented systems that are currently in place. It is safe to say that many Loss Prevention Executives have woken up to the fact that in the current tough economic climate an environment which has historically always increased the volume of criminal activity they have to take a more pro-active stance to reduce losses."
Whilst training and increasing awareness of shrinkage across the retail sector is one option in creating a culture of loss prevention, 12% of retailers identified technology as an alternative to training in order to create a positive culture across their business.
Volumatic, the UK's leading manufacturer of intelligent cash handling equipment, have found that many retailers are adopting it's Counter Cash Intelligent (CCi) cash handling product to enforce a culture of loss prevention across the business.
James Harris, Volumatic's Commercial Director, said: "Engaging with the operations and finance teams is clearly high on the agenda for many Loss Prevention professionals. Indeed, we see it as imperative for retailers to embrace new technologies that can benefit their businesses as a whole to promote a culture of loss prevention. CCi removes the opportunity for good people to make bad decisions as the technology effectively implements a culture of loss prevention across the business."
Harris added: "Interestingly we are seeing the more progressive retailers embrace the concept and develop it even further to engage with the wider business, for example with purchasing, logistics and new store acquisition. It is only when retailers recognise the benefits CCi delivers across not only loss prevention, but also retail operations, finance, human resources and IT departments that the business case truly starts to stack up."
"It is an exciting development because, in these tough economic times, retailers who have already looked to every aspect of their business to optimise performance can now see a new way to take loss out of the business and deliver benefits straight to their bottom lines. Whilst training and a greater awareness will certainly assist retailers in reducing losses, technology offers them the opportunity to take that promotion of a positive attitude even further to a point where it can actually be enforced."
Bessant advised: "If retailers integrate new intelligent technology into their systems at the same time as working to educate staff they will have more success in creating a culture of loss prevention. It is imperative for retailers to have staff that feel valued, and feel passionately enough about the business to protect its interests, working in harmony with state-of-the-art technology to provide comprehensive security. Only with staff and technology working together will retailers see a culture shift capable of a positive impact on their profits."
Copies of the report can be obtained by visiting Martec's website:

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