Retail Executive

NOV/DEC 2017

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

Issue link: http://digital.retailexecutive.com/i/889383

Contents of this Issue

Navigation

Page 40 of 47

shortage, it became important for them to control loss. This is the first step toward reducing shrink. The number one thing I have always requested from se- nior leadership is to enforce accountability down to the store manager level, because that's where the shrink re- ally occurs — at the store. I'm an LP professional, so I am able to easily sift through what's real and what's "show- time" when I visit the stores; store managers are good at showtime. But if store managers are truly invested and engaged in their stores, I am able to glean that simply by walking through the store, talking to the manager, notic- ing the condition of the store, talking to associates, etc. When you hold people accountable for shrink, the focus on controlling loss is noticeably better and profitability in- creases. Why? Because they execute the controls already built into the policies and procedures more effectively. This leads to the "wave out" part of the Wave Theory. When shrink improves to an acceptable level, the wave goes out, meaning that the C-suite tends to reduce its focus on it. And, as a result, shrink is removed from em- ployee performance metrics. In my experience, when you remove the accountability for shrink, shortage goes back up. Most of the senior leadership team members I have worked with in my career are very savvy, and they understood my point. The secret to consistently low shrink is to put accountability for shortage in place and keep it there. R to lack of proper receiving check-in, the shortage may actually be happening in the distribution center. You won't be able to correct the problem because you don't know it exists. By making each and every employee an LP advocate — and adding accountability to their performance metrics — processes and procedures are better executed, shrink decreases, and profitability increases. RETAIL EXECUTIVE: When you sit down with the members of the retail C-suite to discuss ongoing LP efforts, what titles must be part of the discussion? KEENAN: The top LP person in the organization should be part of the senior leadership team. Many companies don't include loss prevention on their senior leadership team because the meetings are "business discussions." In these meetings, they talk about the business, what's working, what isn't working, what product is struggling, what stores are struggling, what markets are struggling, what regions are struggling, etc. Part of what LP professionals have to do is to realize that if they want to be truly effective and be considered part of the business, they actually have to attend the high-level meetings that they probably aren't attending now. It's important to make sure that LP and the C-suite alike understand that LP is a critical component of a suc- cessful retail business operation. The more LP knows, the more we can help support company business initia- tives. LP professionals should be business professionals with expertise in loss prevention. In addition to equip- ment and staff, I fight for accountability from the store manager level up. If the C-suite is an advocate for loss prevention, it will add value to the profitability and suc- cess of the business. RETAIL EXECUTIVE: You've coined your "Wave Theory" with regard to shrink. Please explain. KEENAN: The Wave Theory works like this. First, there's the wave coming in. When shrink is high, LP leaders receive support and resources from senior leadership to address the profit drain. For example, one of my for- mer employers had a bad shrink problem. I spoke to the head of stores about including shortage on field em- ployees' performance reviews. But you can put only so many metrics on a performance review. There was quite a bit of objection to it, but because shrink was high, we were able to include shortage in reviews. Once we did, there was an immediate increased focus on shrink. Sure enough, store managers and district managers began calling my team to inquire about how to reduce shrink. Once managers were being held accountable for the It's important to make sure that LP and the C-suite alike understand that LP is a critical component of a successful retail business operation. RETAILEXECUTIVE.COM NOVEMBER/DECEMBER 2017 39

Articles in this issue

Links on this page

Archives of this issue

view archives of Retail Executive - NOV/DEC 2017