Retail shrinkage is like death and taxes – inevitable. If you spend all your time beating your head against the wall trying to lower your shrink in your shoe department to zero, you can be sure that there will be big screen TV’s from your electronics department marching freely out your front door. You’re not going to be able to stop it all; to even entertain that thought is folly. What you need to do is find an acceptable way to manage your retail shrinkage so that your business remains a profitable one.
First you have to realize where your retail shrinkage is coming from. These days it is measured that 70% of losses in the retail industry come from theft, either shoplifting or internal theft. Believe it or not, that’s the good news. The bad news is that number seems to be on the rise. It is believed that this increase is a result of the global economic crisis mixed with unstable energy costs which get passed on to consumers raising the prices of goods across the board. Higher prices + lower income = more theft.
Now, I’ve found that the best way to manage retail shrinkage is to learn to think like a shoplifter. Anticipate the merchandise that will be most attractive to them place a priority on the security of that merchandise. For instance, if you run a children’s clothing store there’s no point in wasting your efforts securing your Elmo merchandise when SpongeBob is the hottest thing out this year. When it comes to internal theft I suggest surveillance, surveillance, surveillance. In the words of Niccolo Machiavelli, “It is better to be feared than loved, if you cannot be both.” Let it be known that you are watching and that you will prosecute any violators to the fullest extent of the law. Practice this and you’ll find your retail shrinkage becoming more manageable each day.