If you're a regular reader of this blog, then you may notice that a lot of what I talk about angles itself towards the improvement of customer service.
It's something I've become very passionate about and I want to pass on everything I know to retailers like yourself to help increase the standards in customer service. This, in turn, would help your business grow (hopefully!).
This week I want to share a few of my anecdotes relating to theft and shoplifting, and how good customer service can actually help you reduce shoplifting shrinkage.
I may have just thrown some industry jargon at you. What does shrinkage mean, exactly?
What Is Shrinkage?
Shrinkage is simply a word to describe the loss of inventory and can be caused by multiple factors such as:
- Shoplifting; by far the most common cause of shrinkage and can sometimes account for over 40% of shrinkage
- Employee theft; this cause holds the second place of around 30% of shrinkage
- Admin errors; usually sits around 20% of shrinkage
- Vendor fraud; very infrequent but accounts for around 5% of shrinkage
- Other unknown losses; any unknown or uncategorised causes will usually sit at around 5% of shrinkage
My focus this week is, of course, shoplifting.
As promised, here's a personal story to learn from...
Now You See Me, Now You Don't.
During my early years working in retail, I was quite the naive employee until I managed to build up a collection of war stories.
When starting out in retail, everyone (including me) thinks that they're vigilant enough and that stock would never get stolen right from under their nose.
What you've got to learn is that there's people out there that shoplift for a living and I'm not talking about the odd snatch and grab, I'm talking about extremely sophisticated methods that'll leave you scratching your head — and believe me they will.
Let's start with a bit of context...
Every day each team member of the store would be allocated a section to cover, this is to be able to maintain the display standards (keeping everything neat and tidy after being handled by customers) and to service customers who enter your particular section.
Majority of the time I would elect myself to the clothing section rather than the footwear section as I took ownership of the visual merchandising side, plus I became very anal about how the clothes should be presented — everything needed to line up perfectly. All of the time!
One day I was covering the back-end of the clothing section as I had planned to refresh all of the displays to reflect the new collections. This part of the store also happened to host our most desirable and most expensive brands, which we would perform a stock count on every hour, on the hour.
During this weekday morning I decided to crack on with these displays as it was quiet. Within this 2 hour window, only a handful of customers had come into the store. Luckily I had greeted every single one of them. Or so I thought.
It got to midday, which was just in time for the next stock count and BOOM — a whole shelf of folded polo shirts had been left empty.
I stood there scratching my head, asking if my colleagues had been playing a prank on me. After a few unsuccessful attempts trying to probe them to own up, my mouth went dry and I finally swallowed my pride. It was a painful pill to swallow — especially when I reviewed the CCTV and just watched the couple of professionals push several lines of stock into a foil-lined bag whilst I had my back turned to concentrate on folding a t-shirt. I didn't even notice them come in.
All I needed to do was to acknowledge them with a friendly greeting and to keep myself available until they left the section or store. Better yet, I could've even communicated with a colleague to help cover me whilst I was busy.
Luckily you can get affordable retail and shop insurance policies which would cover the stock in the event of theft, however, you don't want to be dealing with an insurance company all of the time, do you?
Be proactive. It's good practise to ensure that EVERY customer that walks into the store receives a warm greeting and that there's always someone immediately available to attend to the customers' needs. Doing this will let the professionals know that you are vigilant (some are persistent so it'll take more than a greeting, but it just reduces the chances) and the amateur opportunists will not have the perfect opportunity created by you or your team.
Also, you might be thinking that by only selling online you have zero chances of shrinkage. Wrong. Any deliveries that go missing or mishaps in warehousing — this is still shrinkage. Make sure that you secure the right delivery and logistics partner, they have a secure operating model to reduce the chances of theft and in the unfortunate event, everything is still insured whilst in transit.
Let me know if you have any stories or strategies that work as a great deterrent.
Email me at email@example.com
Until next time!