Amid heightened levels of business competition and heavy margin pressure, the strategic management of risk and the reduction of shrink can make substantial contributions to both profitability and customer satisfaction. Whether an organization is successful often hinges on identifying those vulnerabilities before losses occur.
A U.S. retail industry survey found shrink equal to 1.47 percent of revenue. Industrywide, that translates to roughly $44 billion – incentive enough to seek a remedy, especially because shrink reduction falls mostly to the bottom line. Considering the stakes, even modest improvements can have significant impact.
In addition, the emergence of omnichannel retailing increases the importance of risk mitigation, shrink management and unit integrity in affecting the customer experience and in driving profitability. Today’s consumer can search for, purchase and receive products in more ways than ever before; and inventory integrity and accuracy are at the center of that consumer’s experience.
Think Strategically
In retail, it is inherent to stockpile information from massive numbers of transactions. Such data can add value to various segments of the business, including loss prevention (LP) programs. The challenge lies in converting the data into actionable information, but all too often the collected data remains underutilized …
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