Keep Loss Prevention in the Forefront

Loss PreventionLoss prevention is a necessary management activity, as independent retailers could potentially face a shortfall in growth and gross profit margins if loss prevention, asset protection and physical security are not addressed properly. According, to Retail Systems Research (RSR), at the peak of the recession, research showed that, “44 percent of survey respondents reported their loss prevention activity had risen as a result of the economy.” Yet, as the economy makes a comeback, are store owners likely to shift their focus and forget about the necessity of loss prevention? As Eric White, head of the retail strategy practice at Wren and with 20 years of experience in loss prevention, mentions, “Loss prevention is one of the least understood functional areas in retail.”

Better Understanding of Loss Prevention

Loss prevention, as defined by Wikipedia, encompasses all profit (economic) preservation activities across the whole retailing business spectrum. Loss prevention activities encompass the securing of cash management systems, implementing safety monitoring and enforcement, providing inventory accountability, developing security policies, among others. Loss prevention is most commonly associated with store security, as nearly 98 percent of retailers claim to use video surveillance in their stores; however, store security is only one of many responsibilities for loss prevention personnel.

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White suggests that the misunderstood and sometimes forgotten function of the loss prevention team, “could be due to the fact that in the last decade, loss prevention has transformed from a discipline largely focused on chasing shoplifters and investigating incidents, to one that salvages retailers’ bottom lines from losses sparked by inefficient operations, administrative snafus, organized retail crime,” and more. To make their efforts a success, loss prevention personnel need to have more than detailed knowledge of merchandising, supply chain, customer service and operations; they also need to have a marketing strategy to ensure loss prevention is an appreciated and utilized component of retail. No matter the economic state, loss prevention is an essential aspect to the daily activity that goes on in each and every store. The personnel in charge of mitigating risk, may not consider marketing their forte, but as White explains, “it is absolutely essential to getting the visibility you (LP personnel) and your activities deserve and even improving your performance by getting the assistance and resources you need.”