Five Ways to Protect Your Business On and Offline
By Paul Jones, eBay
The holiday season brings increased foot traffic for retail store owners and the potential to increase top line sales – and this year promises to be the biggest yet. According to the National Retail Federation (NRF), holiday sales are expected to reach $616.9 billion, an increase of more than four percent from 2013. As many retailers’ year is made or lost in the fourth quarter, IT managers cannot afford to have their business stalled for any reason during busy holiday shopping season – both on and offline. From severe winter weather conditions to security threats, many retailers are unprepared for the dangers that loom over the most crucial sales period of the year.
In order to prevent or minimize these threats, retailers must establish a loss prevention program that helps protect their business. Retailers that run an effective loss prevention program experience huge financial gains while those that don’t risk significant loss.
If you’re a retailer preparing for the holiday season, follow these five loss prevention methods to protecting your business:
1. Combat Organized Retail Crime through Open Communication
One concern for many retailers is Organized Retail Crime (ORC). In the most recent NRF annual Organized Retail Crime Survey, 88 percent of retailers reported being a victim of ORC activity within their stores and another 48 percent said ORC had targeted their online operations.
In order to address ORC issues, effective measures must be taken by the whole company to increase communication internally and externally, including:
• Consistent internal reporting of activity associated with ORC groups – Employees working in stores or monitoring online activity should be provided with an effective method to report large loss issues and attempts that can be flagged across the company.
• Proper collection and analysis of reports – The reports need to be collected in a manner that can be stored and analyzed to spot patterns and potential ORC attacks.
• Communicate with peers at other retailers – Join and actively participate in groups that work with law enforcement and retailers to combat ORC.
2. Hire and Train the Best Workforce
The dramatic increased sales volume in your brick-and-mortar and online operations stresses your loss prevention program from every angle. Each holiday season, retailers hire seasonal employees to service the increasing volume of customers in-stores and online. This new work force is often comprised of inexperienced employees that are not committed to the success of the retailer or a loss prevention program.
• Hiring: To ensure you hire the best talent, use screening and background checks couple with reference checks to ensure temporary employees have the necessary skills and will appropriately represent your company.
• Training: Training the entire workforce, temporary and fulltime, is also critical during the holidays. Work with your human resources department to establish a loss prevention module as part of the orientation curriculum for all new employees. One of the training secrets is to teach all employees to meet and greet customers as they enter stores. Not only does this boost customer attitudes, it’s also an effective deterrent to shoplifting.
• Educating: Develop, implement and educate employees on what to do when they observe internal or external theft. Design policies and procedures geared to critical loss prevention concerns, such as: what to do when they spot a shoplifter or how to complete a known loss report.
3. Quickly Identify POS Transactions and Fulfilment Losses
The increased traffic in your stores and online orders will hopefully result in increased sales and profit. If you are successful in converting the increased traffic to sales, it may be more difficult to identify criminal activity at point of sale (POS) and in your fulfilment operations.
Internally agree on the best tracking method for online and offline transactions that is then duplicated across all locations. This ensures consistency and will make compiling reports across all locations easier. Use real time analytics and monitoring to identify abnormal patterns or irregularities that could signal criminal behavior.
4. Own Your Numbers and Establish a Baseline
Tracking and analysis is a crucial step of protecting your business during the holiday season. Create a history of in-store and online transactions that can be evaluated season after season. Use this information to establish a comparative point to measure the current activity against – including overall transactions, losses and potential ORC activity.
Data points that are helpful to track include: known loss, store sales, return rates and margin. Changes in these points verse the previous year assist in proactively identifying both internal and external loss issues and will help prepare you for next year.
5. Utilize Prevention Tactics to Stay Ahead of the Threats
The most effective activity to keep losses low is to implement a program that ensures the loss never occurs. In both brick and mortar locations and online sales, using technology to your advantage is a must.
A critical first step is to process credit transactions and fulfilment orders with effective screening measures. Maintain and inject the information of your good customers and the attributes of criminal attempts into the decision tree when approving orders. Above all, make sure you data is secure, encrypted and up to PCI compliance standards.
To keep your business safe this holiday season, invest in a loss prevention program and follow these tips to identify and combat any unauthorized activity that could be detrimental to your sales.
Paul Jones is the senior director of Global Asset Protection for eBay where he leads efforts to develop programs and strategies to protect the eBay Inc. sites from criminality. Paul has over 20 years of retail loss prevention experience, most recently, as vice president of The Retail Industry Leaders Association (RILA) Asset Protection initiatives.