Can You Put That LP Training Off?

By Matt Pillar, chief editor

Not many statistics catch my attention any more, but while researching an article last week I came across a stat that surprised me. According to the 2012 National Supermarket Shrink Study conducted by The Retail Control Group and FMI, 64% of all reported store shrink was caused by “a breakdown in or the absence of operational controls known to control and/or prevent.” That’s compared to the 36% of supermarket shrink reportedly caused by theft. Training, anyone?

If there’s a caveat about this particular study it’s that it’s specific to grocery, where operational error has (arguably) more costly consequences than most segments. Controlling or preventing shrink in grocery can have more to do with monitoring the temperature of refrigerator cases than monitoring stores for fraudulent activity. And that leads us to the point.

Shrink is shrink, and according to this study, most associates don’t know it when they see it in any form. If the study’s finding that 54% of companies “don’t have formal LP training for district managers, store managers, cashiers and/or employees” is true, that’s not about to change. Unless, that is, LP and operations step in with some training – and not just the “watch for shoplifters” kind.

If operational error is the leading source of shrink in grocery, then the grocery LP professional is obliged to change from focusing on theft prevention to operations improvement. It might not sound as fun or challenging, but reward lives close to opportunity – operations improvement is obviously the most opportune place to make an impact minimizing shrink. For years now, LP professionals have fought hard for influence and their place at the corporate DM table. As the source of shrink shifts, it’s time for LP to use that influence in its interactions with operations and IT. Prove that your expertise reaches far beyond security by demonstrating to the store operations department that many of the same tools used to monitor a store for bad guys and fraud detection can also be used for operational improvement (exception reporting, video surveillance, alarm monitoring, DVR/POS integration, etc.).

The shift means sharing the infrastructure and being the hero who identifies more operator error than fraud at the checkstand. And why not embrace that role, if the errors really do cost more than the fraud anyway? The shift means focusing alarm integration on monitoring the temperature in freezer and deli cases and saving the day by saving perishables, not by busting burglars. Mostly, it means assuming a lead role in the training efforts that will catalyze the operational improvements that minimize the store’s largest source of shrink.

If you’re looking for help for you, The Loss Prevention Foundation has done a great job building the cross-disciplinary training that’s necessary for LP professional success into its curriculum. If you’re already qualified/certified and you’re looking for help establishing a cross-disciplinary training program in your retail environment, get in touch with a company like Protiviti or Retail Control for help.