In the latest survey shrink remains a significant operational challenge for retailers around the world, with loss rates ranging from 1 percent of sales in Japan to 1.6 percent in Mexico and Brazil.
In Asia we are seeing an increase of shrink from opportunist theft and organised retail crime. Healthy consumer demand against the background of strong economic growth is supporting rapid growth for a diverse range of retail outlets. This is coupled with the various food scandals such as the milk scandal in Mainland China, which has also driven organised crime towards baby formula taken from other Asian Countries to supply demand in Mainland China.
RIA: What are the challenges facing Asian retailers with regard to organised and opportunistic theft?
MG: Retailers today want to ensure their products are available on the shelves for consumers to buy. In that respect theft is one of the main challenges. For 12 years, Checkpoint Systems has sought to provide insight to retailers about the state of shrink and theft in the form of an annual research study. This study called the Global Retail Theft Barometer provides retailers with the industry’s first and only statistical research on global theft.
RIA: Are there comparisons with the US and Europe? If not, how is the situation different in Asia?
MG: Globally all Retailers understand that cutting shrink requires an ongoing commitment to deter shoplifters and reduce internal theft, but also to addressing many of the non related causes, such as supply chain inefficiencies or shortcomings with in store process. The difference between Asia and the US / European market is the double-digit growth we are seeing in retail across Asia. The tier one cities in Asia have shopping centres that in many cases are superior in fit out and opulence compared to Paris / New York / London. All the luxury brands see Asia as their growth opportunity.
From a product perspective particularly the global brands are as desirable in Asia as they are in Europe and North America. Examples are: Health and Beauty products / Electronic Games / DVD’s / Apparel fashion are all desirable in Asia and with the increased focus with on line shopping the global brands are becoming stronger.
RIA: What should retailers be doing to deter theft?
MG: The starting point to consider – no loss prevention method is 100% effective and there is no "one type suits all" solution. As a result, a combination of several loss prevention methods is considered to offer best practice when striving to control losses. The key point is to ensure merchandise availability on the shelves with solutions that not only deter theft but also enables products to be on open display to encourage impulse buying.
The most effective solutions were indicated to depend on the type of store and size of products, with different methods and systems working best for different products (e.g. display solutions such as keepers for perfumes. Partnering with a loss prevention specialist such as Checkpoint Systems is one way of being more confident in limiting further shrinkage in the future.
Human monitoring is key even with the implementation of sophisticated loss prevention technology and you cannot beat excellent customer service to deter theft.
RIA: What solutions do you offer and are there additional benefits to retailers?
MG: Checkpoint have a wide range of solutions. From RFID to a low cost Time Delay Mechanical Devices, the Checkpoint offering has a solution for each type of store. We work within our customer budgets, with our primary goal of ensuring merchandise availability, reducing their theft and increasing their sales. Retailers who work with Checkpoint see the benefits through our commitment and passion, by fully understanding how the retailer’s environment works and how we can reduce shrinkage. We offer extensive training programs, ensuring all store associates are up to speed with best practices, our offering goes from face to face to online portal. We work with the stores teams right the way through to CEO’s. Checkpoint is a future proof company that loves a challenge. We are more than happy to look at the worst situation possible and see if we can turn it a round.
RIA: EAS systems should be user-friendly for employees but should also be future-proof. What does Checkpoint have in its arsenal of shrink management solutions that can allow the small and medium retailer to implement with their existing platforms but also allow them to upgrade to integrate future technology?
MG: The Checkpoint offer is suitable for all retailers, each EAS platform has many peripherals that can be added on at any time in the life cycle of the EAS equipment, a small or medium retailer can install at EAS solution, then years later maybe look at Traffic Flow Anaylsis Program that can be added onto their current EAS Solution. This solution allows the retailer to then start looking at traffic patterns ensuring they have the right amount of team members within their store at the right time, to ensure the maximum sale. We also offer small and medium retailers advice on Protection @ Source that is for products that are deemed to high theft and easily re-saleable. These can be manufactured with a security device. Checkpoint can assist the Retailer by helping them understand is the best available solution for to protect the product’s brand, reduce their labour costs and freeing up team members to do what they are good at….sell.
RIA: Checkpoint have coined the term, Merchandise Visibility. Explain its development and how retailers can deploy in-store.
MG: More than merchandise visibility, we’re talking about merchandise availability. The consumer really does not care why the merchandise is not on the shelf (either because of shoplifting or because of operational inefficiencies). Research suggests that a consumer will change stores if they experience 2.3 times out-of-stocks on the merchandise they intended to purchase. Having the merchandise available at the store is critical to ensure the shopper experience.
Checkpoint can help improve the retailer’s merchandise availability through 2 areas:
- Shrink management: through our different security solutions, preventing the merchandise from being stolen with solutions ensuring the products are on open display for the consumer to buy
- Merchandise visibility: through our RFID solutions, we can provide visibility to the retailer’s inventory. Not just that they have 10 items in stock, but that those 10 items, 5 are blue, 3 black and 2 red.
By protecting the merchandise on the shelf, knowing what is in the store at all times, the retailer now has the tools to ensure merchandise availability – that is the right product at the right place at the right time for that moment of truth when the shopper is ready to make the purchase.
Find out more at Checkpoint Systems.
Mark Gentle is the Vice President – Merchandise Availability Solutions Asia Pacific with Checkpoint Systems.
Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry. Over the past 12 years Mark has held numerous roles with Checkpoint in Europe, Asia Pacific and Australia. Mark has extensive international experience in sales, manufacturing, project management, and change implementation.
Mark has qualifications in Electrical Engineering and an MBA from the Southern Cross University.