As we come upon the new year, I thought I might humbly suggest some resolutions for the retail loss prevention industry for 2010. I’m sure some of them will be controversial but they are all made in the spirit of moving our industry forward. Please feel free to comment.
#1 – Don’t make numbers up
In our quest to quantify what we do, let’s be careful about simply pulling numbers out of thin air or estimating numbers and presenting them as fact. In fact, there are several parts of our business where we simply don’t have accurate numbers. Let’s strive to change that fact, not make up facts.
#2 – Don’t make the case for loss prevention by acting like Chicken Little
The primary message I have gleaned from news articles about retail loss prevention during this past year is that things are really bad. I mean, historically bad. We’re talking drastically bad. ORC gangs are hitting all the malls, shoplifting is up because of the economy, on-line auction sites are siphoning millions, if not billions, of dollars via fenced and counterfeit goods, there are no laws on the books that help us address these issues, retail theft is funding terrorism, our budgets have been cut, senior loss prevention positions are being eliminated, cats and dogs are living together…wait, that last one was actually from the movie Ghostbusters.
And, as a result, what has happened to shrinkage? Well, if you believe the numbers in the National Retail Security Survey (see resolution #1 above), retail shrinkage in the U.S. came in at its second lowest level in the 17 or so years the survey has been done. I say kudos to all the practitioners in our business who have continued to improve the way we do our business, who have leveraged technology, and have evolved their approach and response to the emerging threats listed above.
#3 – Demand that our industry associations fund research and education
I like our industry associations. I participate in several of them. I think they are well-intentioned and have expanded what they do for our industry over the past 15 years. The staff members of the associations are hard working, helpful, and eager to serve the industry. Their advisory boards are comprised of individuals who give a broad representation of the retail industry. But, the one area where I think they need to step up is in the area of funding research and education in our industry. The lack of rigorous study and research in our industry is largely the reason that we need resolutions one and two above.
There are models for how this could work and it does not have to be difficult. The Europeans, working through the ECR framework, have figured out how to do this effectively with the process being driven by the retailers. I don’t see any reason this can’t happen in the U.S. However, this will only happen if practitioners demand it. When I look at other large professional and trade organizations, they typically have more robust offerings to their membership in this regard.
#4 – Don’t create a new name for what we do
Retail security, loss prevention, assets protection, profit protection… I really don’t care what we call our industry (I know there are some that care passionately about it), but I do know that having multiple terminologies and nomenclature does not help others understand our profession. Look at established professions like medicine, finance, IT, HR, and others. By and large, they have established consistent labels for positions within their industry. There is a clear distinction in medicine between a doctor, a physician’s assistant, a registered nurse, etc. In finance, there is a clear distinction between a bookkeeper and a CPA. I don’t hold illusions that we are going to reach consensus in 2010, but hope we don’t have more diffusion.
High unemployment. More people on food stamps. Fewer homeowners. Yet for all the signs of recession, one thing is missing: More crime.
Figures released Monday by the FBI show national declines in murder, car thefts and other crimes. But experts are scratching their heads over ebbing crime rates, which make this recession different from other economic downturns in the past half-century. Among the early guesses as to the reasons: jobless people being at home, where they can watch for thieves, and the American population getting older. Older people generally commit fewer crimes.
The FBI figures, preliminary tabulations from the first half of 2009, show crime falling across the country, even at a time of high unemployment, foreclosures and layoffs. Most surprisingly, murder and manslaughter were down 10 percent.
A devastated American economy did not translate into an increase in unethical behavior at U.S. companies, according to a new study from the Ethics Resource Center (ERC). Although the ERC’s 2009 National Business Ethics Survey report found that retaliation against employees who reported misconduct has increased slightly since a similar survey two years earlier, most other measures of ethical behavior improved. According to the report:
- Overall misconduct at U.S. workplaces is down. Fewer employees said they had witnessed misconduct on the job. This measure fell from 56 percent in 2007 to 49 percent in 2009.
- Whistle-blowing has increased. Most workers—63 percent—who observed misconduct said that they reported it. That’s up from 58 percent two years earlier.
- Ethical culture appears to be stronger. ERC’s measures of the strength of the ethical culture in the workplace increased from 53 percent in 2007 to 62 percent in 2009.
- Pressure to cut corners has decreased. Overall, employees who perceived pressure to commit an ethics violation—to cut corners, or worse—declined slightly, from 10 percent in 2007 to 8 percent in the latest survey.
- Perceived retaliation as a result of a report of misconduct rose, from 12 to 15 percent, over the two years.
However, the ERC report sounds a warning: “The lesson for organizations is that when more settled, prosperous times return, misconduct is likely to creep upward again” as the sense of crisis dissipates.
A French court on Monday ordered online auction site eBay to pay 1.7 million euros (2.5 million dollars) to luxury goods maker LVMH for unauthorised selling of its perfumes, the companies said. Louis Vuitton Moet Hennessy administrator Pierre Gode said the court ordered the payment after eBay breached an earlier ruling forbidding it from selling LVMH brand perfumes such as Kenzo, Givenchy, Christian Dior and Guerlain.
Gode said that Monday’s decision protected its right to choose how its products are sold. Ebay’s director in France, Alexander von Schirmeister, responded in a statement that the ruling penalised consumers. In September a French court ordered eBay to pay 80,000 euros to LVMH for selling fake versions of its branded perfumes.
I’m not sure what to make of this report out of the UK conducted by SPSS/IBM. It seems to be focused towards the IT side of business but makes a claim early on that there has been “around a 16 per cent overall growth in fraud throughout the UK” during this recession. But, when you look at the statistics, only 12% of surveyed companies cited an increase in fraud while “82% asserted its constancy.”
As I have asserted in the past, it is important how we present our business case around our function. We cannot lead with questionable claims and statistics if we want to be taken credibly. Take a look at this report here and see if you can make more sense of it that I can…
The Metropolitan Police said Thursday it shut down more than 1,200 Web sites that purported to sell merchandise such as Tiffany jewelry and Ugg boots but instead shipped counterfeit goods or nothing at all, and put shoppers at risk of identity theft and financial fraud.
The Metropolitan Police said its Central e-Crime Unit worked with U.K. domain-name registry Nominet to shut down the Web addresses of the sites, and to keep them from being re-registered.
Police said the sites were run by criminal networks, and most of the sites were run out of Asia, despite having “co.uk” domain names, thanks to false registration details. Police alleged that the Web sites are thought to have generated “millions of pounds” for the scammers.
A recent decision by the Citzens Advice Bureau (CAB) to stand against civil recovery in the UK has led to a slew of negative publicity regarding the practice. It is ironic that CAB labels it as an “alternative justice system” as the continued laxing of criminal sanctions regarding shoplifting almost force UK retailers to find new means to combat shoptheft. For a BBC article on this issue, click here.
RSR Research’s latest report, “Loss Prevention 2010: Retailers Battling Shrink in Tough Times” finds more retailers than ever reporting the priority of LP rising in their organizations. These findings are based on a survey of 83 retailers in the autumn of 2009. The report can be downloaded at http://www.retailsystemsresearch.com/_document/summary/1037.